In the Keynesian model, a decrease in real autonomous spending results in a more than proportional decrease in real Gross Domestic Product (GDP) because
A) consumption decreases as a result of lower real disposable income.
B) consumption increases while real disposable income decreases.
C) real autonomous spending decreases further as real disposable income decreases.
D) government spending also decreases.
A
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Central planning systems were used in the former Soviet Union but since this union dissolved no other nations now use this allocation process.
Answer the following statement true (T) or false (F)
Whenever a cartel in a duopoly breaks down, a. both firms obtain higher profits
b. total output in the market will rise. c. price in the market will rise. d. the socially optimal output will be produced.
Other things constant, which of the following would reduce unemployment and raise inflation?
a. businesses become more optimistic about the future of the economy b. because of high growth abroad, net exports rise c. the government cuts taxes d. All of the above are correct.
Which of the following is most important for young people wanting to increase their wealth and improve their living standard over time?
A) spending all of their current income on consumer goods and services B) extensive use of credit cards to purchase needed items C) purchasing a new car at least every two years D) regularly saving and investing a portion of their income