Suppose the marginal propensity to consume is 50%, and the government increases purchases by $100,000 from Supplier A. Supplier A will then spend an extra ______ on consumer inputs purchased from Supplier B, and Supplier B will then spend an additional ______ on consumer inputs.
a. $100,000. $100,000
b. $150,000; $225,000
c. $50,000; $25,000
d. $5,000; $500
c. $50,000; $25,000
You might also like to view...
Can a country have a trade deficit forever?
What will be an ideal response?
If a revenue-maximizing firm is told that the price elasticity of demand is equal to one, it should:
a. raise prices 1 percent. b. lower prices 1 percent. c. raise prices until the elasticity becomes very high. d. keep the price where it is. e. lower prices until the elasticity becomes very high.
If domestic returns are greater than foreign returns, then:
a. the spot rate is too high. b. the spot rate is too low. c. expectations of future exchange rates will change in the long run. d. There is no opportunity for arbitrage.
Empirical studies indicate that entry:
A. increases price and profits. B. decreases price, but increases profits. C. decreases price and profits. D. increases price, but decreases profits.