Mathematically, the value of the spending multiplier in terms of the marginal propensity to consume (MPC) is given by the formula:

Which of the following best describes an externality?

A) something that is external to the economy B) a sales tax on a good in addition to the market price C) an effect of a transaction felt by someone other than the buyer or seller D) anything produced in other countries E) a change from what is normal

If the government imposed a price ceiling on gasoline above this good's current market clearing price, there would be

A) a shortage of gasoline. at the ceiling price. B) a surplus of gasoline at the ceiling price. C) an increase in the price of gasoline. D) no change in the price of gasoline.