When an increase in government purchases increases the income of some people, and those people spend some of that increase in income on additional consumer goods, we have seen a demonstration of ?

Related Mcqs:

1. When an increase in government purchases raises incomes shifts money demand to the right raises the interest rate, and lowers investment we have seen a demonstration of ?

   A. supply-side economics
   B. None of these answers
   C. The crowding-out effect
   D. The multiplier effects

2. If an increase in a consumer’s income causes the consumer to increase his quantity demand of a good, then the good is ?

   A. a complementary good
   B. an inferior good
   C. a normal good
   D. a substitute good

3. Refer to Exhibit 4. Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 If the price of a belt is €10 and the price of a pair of socks is €5, the consumer will choose to buy the commodity bundle represented b point ?

   A. Z
   B. X
   C. Y
   D. the optimal point cannot be determined from this graph

4. Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 Suppose that the price of a pair of socks falls from €5 to €2 The income effect is represented by the movement from point ?

   A. X to point Y
   B. X to point Z
   C. Y to point X
   D. Z to point X

5. Suppose two economists are arguing about policies that deal with unemployment. One economist says. The government could lower unemployment by one percentage point if it would just increase government spending by 50 billion dollars the other economist responds Nonsense and poppycock! If the government spent an additional 50 billion dollars it would reduce unemployment by only one tenth of one percent. and that effect would only be temporary! These economists ?

   A. None of these answers
   B. Disagree because they have different scientific judgments
   C. really don’t disagree at all. It just appears that they disagree
   D. disagree because they have different values

6. If consumers always spend 15 percent of their income on food. then the income elasticity of demand for food is ?

   A. 1.50
   B. 1.15
   C. none of these
   D. 0.15
   E. 1.00

7. An increase in consumer income will increase demand for a _________ but decrease demand for a?

   A. substitute good, inferior good
   B. normal good inferior good
   C. inferior good normal good
   D. normal good, complementary good

8. Suppose the government increases its purchases by Rs16 billion. If the multiplier effect exceeds the crowding out effect, then ?

   A. The aggregate supply curve shifts to the right by more than Rs 16 billion
   B. The aggregate demand curve shifts to the left by more than Rs 16 billion
   C. The aggregate demand curve shifts to the right by more than Rs 16 billion
   D. the aggregate supply curve shifts to the left by more than Rs 16 billion

9. A reduction in interest rates, causes an increases in the monetary base that results in an _________ in the availability of consumer credit and a ________ in the cost of consumer credit?

   A. reduction, increase
   B. reduction, reduction
   C. increase, reduction
   D. increase , increase

10. Within the circular flow of income, an increase in domestic income will tend to increase ?

    A. exports
    B. taxes
    C. inventories
    D. imports