According to the market clearing model, a one unit permanent increase in government purchases causes:
a. GDP to rise about one unit.
b. gross investment to fall about one unit.
c. consumption to fall about one unit.
d. all of the above.
Ans: c. consumption to fall about one unit.
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Installment-plan buying permits consumers to use the income generated from their private assets to pay for goods and services
Indicate whether the statement is true or false
According to the above figure, what are the profits of the firm if it produces 50,000 units?
A) -$5,000 per day B) -$10,000 per day C) -$7,500 per day D) -$17,500 per day
As a competitive economy uses its stocks of a depletable resource,
a. the resource price will fall by ever greater amounts each year. b. the resource price will rise by ever greater amounts each year. c. the use of the resource will increase at an increasing rate. d. resource use will drop to zero.
The effects of a change in government purchases is multiplied throughout an economy...
What will be an ideal response?