The multiplier measures the
A) number of steps it takes to move from one equilibrium to another.
B) rise in saving resulting from a rise in income.
C) marginal propensity to invest.
D) rise in equilibrium GDP resulting from a one dollar rise in planned autonomous expenditures.
D
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The price elasticity of demand for beef is estimated to be 0.60 (in absolute value). This means that a 20 percent increase in the price of beef, holding every thing else constant, will cause the quantity of beef demanded to
A) decrease by 12 percent. B) decrease by 26 percent. C) decrease by 32 percent. D) decrease by 60 percent.
The widespread fall in the prices of homes caused consumers to:
A. decrease their spending, as they struggled to pay back debt. B. increase their spending, as they devoted their money to things other than homes. C. decrease their spending, and increase their debts. D. increase their spending, as saving was viewed as a bad investment.