What can we predict about the effect on consumption of an increase in government spending?
A. Consumption will increase by the amount of the government spending.
B. Consumption will increase by an amount equal to the MPC times the change in real GDP.
C. Consumption will not rise as government spending rises.
D. Consumption will increase by an amount equal to the MPC times the change in government spending.
Answer: B
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The long run aggregate supply curve is vertical because
A) a change in the level of prices will have no effect on real output in the long-run. B) the production possibilities curve is vertical. C) the aggregate demand curve is downward sloping. D) technology increases at a constant rate.
A preferred provider organization (PPO) is: a. an organization that contracts with physicians, medical facilities, employers, and individuals to provide medical care to a group of individuals. b. a network of doctors who agree to provide services to a health plan's enrollees at discounted fees
c. a not-for-profit hospital network. d. a structure that utilizes traditional insurance plans.
When an economy's simple spending multiplier is 2.5, then its marginal propensity to consume is 0.4
a. True b. False Indicate whether the statement is true or false
Assume that between 1998 and 2008, nominal GDP increased from $7 trillion to $12 trillion and that the price index rose from 100 to 133.3 . Which of the following expresses GDP for 2008 in terms of 1998 prices?
a. $7.5 trillion b. $9.0 trillion c. $9.5 trillion d. $16.0 trillion