Multiplier effect is the additional shifts in aggregate demand that result when expansionary fiscal policy increases income and thereby increases consumer spending.

Marcus is of the opinion that the theory of liquidity preference explains the determination of the interest rate very well. Most economists would say that Marcus's opinion is

a. Keynesian in nature, and that his view is more valid for the long run than for the short run. b. classical in nature, and that his view is more valid for the long run than for the short run. c. Keynesian in nature, and that his view is more valid for the short run than for the long run. d. classical in nature, and that his view is more valid for the short run than for the long run.

Refer to Mexico and Japan. What is the cost of producing 1 bushel of food in Mexico?

a. 3 hours of labor.
b. 1/2 bolt of cloth.
c. 1/3 bushel of imported Japanese food.
d. 1/4 bolt of imported Japanese cloth.