Buyers and sellers use ________ to communicate the quality of goods and services in a world of uncertainty.

If the real interest rate increases, there is

A) an upward shift of the consumption function. B) a movement downward along consumption function. C) a change in the slope of the consumption function. D) a movement upward along the consumption function. E) a downward shift of the consumption function.

Calculate the government purchases multiplier if the marginal propensity to consume equals 0.8, the tax rate is 0.1, and the marginal propensity to import equals 0.2

A) 2.1 B) 1.9 C) 1.7 D) 1.4