CHAPTER 9 - CHAPTER 9 1 The view that the market system...

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CHAPTER 9 1. The view that the market system will ensure full employment is associated with: A) Keynesian economics. B) GDP gap analysis. C) classical economics. D) the aggregate expenditures model. Ans: C 2. Say's law indicates that: A) a stable, inflexible interest rate will guarantee perpetual full employment. B) falling prices will decrease the purchasing power of a declining level of total money demand. C) supply creates its own demand. D) those prices which rise most during prosperity are likely to fall least during depression. Ans: C 3. The most important determinant of consumer spending is: A) the level of household debt. B) consumer expectations. C) the stock of wealth. D) the level of income. Ans: D 4. With an MPS of .4, the MPC will be: A) 1.0 minus .4. B) .4 minus 1.0. C) the reciprocal of the MPS. D) .4. Ans: A 5. As disposable income goes up the: A) APC falls. B) APS falls. C) volume of consumption declines absolutely.
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This note was uploaded on 10/15/2009 for the course ECON 2302 taught by Professor Parker during the Spring '09 term at University of Texas-Tyler.

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CHAPTER 9 - CHAPTER 9 1 The view that the market system...

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