In the CPI, goods and services are weighted according to
a. how long a market has existed for each good or service.
b. the extent to which each good or service is regarded by the government as a necessity.
c. how much consumers buy of each good or service.
d. the number of firms that produce and sell each good or service.
c
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Real business cycle theory emphasizes the role of ________ in causing economic fluctuations
A) agriculture B) technological change C) natural disasters D) wars
Suppose real GDP is $800 billion when the MPC is 0.80, and people decide to increase their saving by $30 billion. Before this change, the economy was in equilibrium with people intending to save $100 billion and producers intending to invest $100 billion. The new equilibrium level of real GDP is:
A. $600 billion. B. $650 billion. C. $680 billion. D. $730 billion.
Politicians have suggested that the budget deficit could be reduced by
A. increasing taxes and reducing expenditures. B. lowering the interest rates. C. forbidding interest payments on government bonds outsourcing. D. imposing higher tariffs on imported goods.
Horizontal equity holds that those with greater ability to pay should pay less.
Answer the following statement true (T) or false (F)