In Country A, the government simultaneously increases its expenditures by $200 billion and increases taxes by $200 billion. If the MPS is equal to 0.5, the government's action ________ real GDP by ________.
A. increases; $200 billion
B. increases; $400 billion
C. decreases; $400 billion
D. has no effect on; $0
Answer: A
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If the typical firm in a perfectly competitive market is currently earning a 5% economic profit, what will happen in this market in the long run?
a. new firms will enter until the economic profits have disappeared. b. firms will exit until the economic profit reaches 10%. c. firms will neither enter nor exit, since 5% economic profit is enough to maintain the existing number of firms in the market. d. It depends on the rate of normal profit in this market.
A rightward movement along a country's aggregate production function implies labor capital deepening
a. True b. False Indicate whether the statement is true or false
This table shows the total costs for various levels of output for a firm operating in a perfectly competitive market.PriceQuantityTC$500$10.00$501$20.00$502$27.50$503$77.50$504$147.50$505$250.00According to the table shown, what is the firm's marginal revenue from the 3rd unit produced?
A. $50 B. $150 C. $90 D. $60
Corporate profits can be broken into three categories: dividends, undistributed profits, and corporate profits taxes
Indicate whether the statement is true or false