The simple spending multiplier is the inverse of the marginal propensity to consume
a. True
b. False
Indicate whether the statement is true or false
False
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The sharp rise in the debt-to-GDP ratio in 2008-2009
a. was exclusively automatic due to the effect of declining income on government outlays and tax revenues. b. was exclusively due to an aggressive fiscal policy. c. was exclusively due to military expenditures. d. was partly automatic due to the effect of declining income on government outlays and tax revenues, and partly due to an aggressive fiscal policy. e. was exclusively due to foreign aid expenditures.
Ignoring the government and foreign sectors, if planned investment spending is $50 billion, planned saving is $70 billion, and real Gross Domestic Product (GDP) is $200 billion, then unplanned inventories will
A. increase $20 billion. B. decrease $20 billion. C. increase $80 billion. D. decrease $80 billion.