Assume the MPC is 0.65 . Assuming only the multiplier effect matters, a decrease in government purchases of $20 billion will shift the aggregate demand curve to the
a. left by about $30.77 billion.
b. left by about $57.1 billion.
c. right by about $57.1 billion.
d. right by about $30.77 billion.
b
You might also like to view...
If a firm buys its labor in a competitive market, then in the short run, a decrease of the demand for the firm's product will cause the firm to
A) offer a higher wage. B) hire fewer workers. C) hire more workers. D) offer a lower wage.
A black market is a market in which
A) goods are traded at prices above their legal maximum prices. B) sales taxes are effectively doubled. C) goods are sold at outlet prices. D) sales take place exclusively at outlet prices.
If the interest rate is 5% then the net present value of these cash flows is
a. $6,020.41 b. $7,380.95 c. -$7,380.95 d. $10,000
Income earned by the factors of production is called
A. gross domestic income. B. disposable personal income. C. national income. D. personal income.