Suppose the price level is fixed, the MPC is .8, and the GDP gap is a negative $200 billion. To achieve full-employment output (exactly), government should:
A. increase government expenditures by $200 billion.
B. reduce taxes by $200 billion.
C. increase government expenditures by $40 billion.
D. reduce taxes by $160 billion.
C. increase government expenditures by $40 billion.
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At an equilibrium price for gasoline,
A. everyone who is willing and able to purchase gasoline at that price can do so. B. surpluses are inevitable. C. market forces will eventually change the quantities demanded and supplied. D. suppliers must be using the most efficient oil-drilling equipment available.
If on-the-job working conditions have improved over time,
a. real GDP will understate the growth rate of real income. b. real GDP will overstate the growth rate of real income. c. the GDP deflator will overestimate inflation. d. real GDP will overstate the growth rate of real income, and the GDP deflator will understate inflation.
Acres of LandTanks of FertilizerTruckloads of Potatoes2002820170202105203135204152205141
Refer to Table 2.4. Increasing the tanks of fertilizer from 4 to 5 will:
A. increase truckloads of potatoes. B. decrease truckloads of potatoes. C. have no effect on truckloads of potatoes. D. require more acres of land.
Suppose a family wants to save $60,000 for a child's tuition. The child will be attending college in 18 years. For simplicity, assume the family is saving for a one-time college tuition payment. If the interest rate is 6%, then about how much does this family need to deposit in the bank today?
A. $10,000 B. $42,000 C. $21,000 D. $57,000