When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline
B. increase; raise; decline
C. decline; lower; expand
D. decline; raise; decline
Answer: C
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Suppose that when disposable income increases by $2,000, consumption spending increases by $1,500. Given this information, we know that the marginal propensity to consume (MPC) is
A) .25. B) .75. C) $1,000/$750 = 1.33. D) 1/.25 = 4.
In reality international trade is determined solely by comparative advantage and the free market forces of supply and demand
a. True b. False Indicate whether the statement is true or false
Which statement is true?
A. The federal government collects much more in direct taxes than in indirect taxes. B. The federal government collects much more in indirect taxes than in direct taxes. C. The federal government collects the same amount in direct taxes as in indirect taxes.
Refer to the above figure. The marginal cost of pollution abatement is curve
A. (1). B. (2). C. (3). D. (4).