Use the aggregate expenditures model and assume an economy is in equilibrium at $5 trillion which is $250 billion below full-employment GDP. If the marginal propensity to consume (MPC) is 0.60, full-employment GDP can be reached if government spending:
a. decreases by $60 billion.
b. decreases by $100 billion.
c. decreases by $250 billion.
d. is held constant.
b
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Pieces of property that serve as a store of value are called
A) assets. B) units of account. C) liabilities. D) borrowings.
Based on the table showing a summary of fiscal policy tools, the prescription for high unemployment is ______.
a. increasing aggregate demand through expansionary policy
b. decreasing aggregate demand through contractionary policy
c. increasing income and business tax rates
d. decreasing government transfer payments and purchases
If a bond's rating improves it should cause the bond's price:
A. and yield to decrease, all other factors constant. B. and yield to increase, all other factors constant. C. to increase and its yield to decrease, all other factors constant. D. to decrease and its yield to increase, all other factors constant.
Monopolists do not face constraints on the prices they charge.
Answer the following statement true (T) or false (F)