The expenditure multiplier measures the change in
A) autonomous spending that results from a change in equilibrium expenditure.
B) equilibrium expenditure from a change in induced consumption.
C) consumption expenditure for a given change in disposable income.
D) equilibrium expenditure that results from a change in autonomous expenditure.
E) the price level that results from a change in real GDP.
D
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The political process by which fiscal policy is made
A) is relatively rapid, contributing to the effectiveness of fiscal policy. B) requires only that the president approve changes to the budget, a decision that takes several months. C) is efficient in reaching a decision within a year. D) is slow and results in a long time lag for fiscal policy.
If the long-run supply curve in a perfectly competitive industry is upward sloping, this is because
A) firms are different. B) firms are identical. C) input prices rise as the industry expands. D) Either A or C.