The multiplier effect means that:
A. consumption is typically several times as large as saving.
B. a change in consumption can cause a larger increase in investment.
C. an increase in investment can cause GDP to change by a larger amount.
D. a decline in the MPC can cause GDP to rise by several times that amount.
C. an increase in investment can cause GDP to change by a larger amount
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If the market illustrated in the above figure was a perfectly competitive market with the MC curve being the sum of all individual firms' marginal costs, then the perfectly competitive price and quantity would be
A) P3 and Q1. B) P5 and Q1. C) P1 and Q1. D) P4 and Q3.
A change in nominal GDP sums up changes in
A) prices alone. B) physical production alone. C) physical production and hours of production time. D) physical production and prices.