If the tax multiplier is -12 and taxes are increased by $6 billion, output
A. falls by $2 billion.
B. increases by $72 billion.
C. falls by $72 billion.
D. increases by $2 billion.
Answer: C
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Suppose the government passes a law eliminating holidays and, as a result, the production of goods and services increases because people work more days per year (and thus enjoy less leisure per year). Based on this scenario, which of the following statements is correct?
a. GDP would definitely increase, despite the fact that GDP includes leisure. b. GDP would definitely increase because GDP excludes leisure. c. GDP could either increase or decrease because GDP includes leisure. d. GDP could either increase or decrease because GDP excludes leisure.
Lowering the required reserve ratio __________ the simple deposit multiplier which will __________ the economy's money supply
A) raises; increase B) raises; decrease C) lowers; increase D) lowers; decrease
When determination of rent is left to the market,
A. that rent price is almost entirely determined by the supply side. B. that price can settle at politically unpopular levels. C. land is fairly distributed among the members of society. D. the supply of land will be perfectly elastic.
Suppose a jar of DeLux popcorn that is ultimately sold to a customer at Friendly Groceries is produced by the following production process: Name of CompanyRevenuesCost of Purchased InputsCitrus Growers Inc.$0.750Florida Jam Company$2.00$0.75The Corner Store$2.50$2.00 If the corn was grown and the jar of popcorn produced in the year 2017, but the jar was sold at Friendly Groceries in the year 2018, what is the contribution of these transactions to GDP in the year 2017?
A. $0.50 B. $2.00 C. $3.00 D. $2.50