The sale of
A) a used textbook does enter GNP.
B) a used textbook does not enter GNP, but the sale of a used house does.
C) both a used textbook and a used house do not enter GNP.
D) a used house does not enter GNP, but the sale of a used book does.
E) the GNP does not include sale of used items priced below $1000.
C
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If the marginal propensity to consume is 0.85 and there are no imports or income taxes, the expenditure multiplier is equal to
A) 1 ÷ (1 - 0.85 ) = 1 ÷ 0.15 = 1.45. B) 0.85 × the change in autonomous expenditure. C) 0.85 ÷ 1 = 0.85. D) 1 ÷ 0.85 = 1.176. E) 1 - 0.85 = 0.15.
A common definition of a recession is a time with
A) a decline in the price level. B) a decline in interest rates. C) a decrease in real GDP for two or more successive quarters. D) a decrease in real GDP for two or more successive years.