An increase in government spending by $100 would, if the MPC = 0.90, result in an increase in real GDP by:
a. $1,000.
b. $9,000.
c. $900.
d. $190.
e. inadequate information is given.
a
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Following the war-time prosperity for capital and the rich during World War I (1914–18), income distribution trended towards greater equality when peace came and market forces replaced the economy's wartime concerns in determining income
distribution. Indicate whether the statement is true or false
What is the federal funds rate? What are the main determinants of the federal funds rate?
What will be an ideal response?
The cyclically adjusted deficit as a percentage of GDP is 2 percent in year 1. This deficit becomes 3 percent of GDP in year 2. It can be concluded from year 1 to year 2 that:
A. fiscal policy was contractionary. B. the federal government is decreasing spending. C. the federal government is increasing taxes. D. fiscal policy was expansionary.
The largest component of total expenditures in the United States is:
A. net exports. B. government purchases. C. consumption. D. gross investment.