Which of the following is not an example of a government purchase?
What will be an ideal response?
Chinese toys to be sold in stores
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In the Keynesian model, the larger the marginal propensity to consume, the:
a. larger the multiplier. b. larger the marginal propensity to save. c. higher the income level of the economy. d. smaller the change in income derived from a given change in government spending.
Using typical estimates of the sacrifice ratio, how much output would likely be sacrificed to reduce inflation from 4 percent to 2 percent?
If TR > TC, a firm would ________ in the short run and ________ in the long run.
A. shut down; contract B. shut down; expand C. operate; expand D. operate; contract
Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower