Suppose that the MPC is 0.7, there is no investment accelerator, and there are no crowding-out effects. If government expenditures increase by $30 billion, then aggregate demand
a. shifts rightward by $100 billion.
b. shifts rightward by $51 billion.
c. shifts rightward by $170 billion.
d. shifts rightward by $72.8 billion.
a
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Answer the following statement(s) true (T) or false (F)
1. In a competitive equilibrium, the industry's output is produced at the lowest possible cost because each firm has the goal of minimizing its cost. 2. Higher costs, whether fixed or variable, will cause a leftward shift in the industry's short-run supply curve. 3. The number of firms in an industry is fixed in the short run. 4. A new licensing fee would cause an immediate upward shift in an industry's short-run supply curve. 5. In a long-run competitive equilibrium, both more efficient and less efficient firms earn zero economic profit.
When an individual or firm in the United States requests that a bank sell foreign exchange, the bank will probably
A) call a foreign bank and arrange a purchase. B) call the central bank and arrange a purchase. C) call another bank customer with foreign exchange holdings. D) call another domestic bank and arrange a purchase. E) call a foreign exchange broker and arrange a purchase.
The currency exchange rate is the rate at which one nation's currency can be exchanged for another
Indicate whether the statement is true or false
The Great Recession of 2007–2009 and the financial crisis of 2008 increased the budget deficit because of: a. an increase in the tax rates for high-income households
b. a sudden increase in terrorist attacks and anthrax scares in the economy. c. low interest rates that crowded out private investment. d. discretionary tax cuts and greater outlays on unemployment benefits. e. greater outlays on national defense spending.