The marginal propensity to consume is 0.75, marginal propensity to invest is 0.3, and the marginal propensity to import is 0.2. What is the size of the multiplier?

Which of the following can a positive analysis accomplish?

a. It can tell an advertising executive what type of ads she ought to order. b. It can tell us how much the demand for a product will increase. c. It can tell us if one policy is better than another. d. It can tell a policy maker what is the best course of action.

Unions may lower real wages in the nonunion sector because

A. Union firms can easily hire nonunion workers for a lower wage. B. Workers who are displaced by higher wages in the unionized sector increase the labor supply in the nonunion sector. C. Nonunion firms adjust wages to avoid the threat of unionization. D. Nonunion firms have difficulty attracting skilled workers away from the unions.