If the marginal leakage rate is 0.2, then a $300 fall in autonomous planned expenditures will shift the IS curve leftward by the amount of
A) $300.
B) $1500.
C) $75.
D) $600.
B
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In the multiple-polluter case for a pollution permit system, suppose Firm 1 and Firm 2 face marginal abatement cost functions of MAC1 = 4.5A1 and MAC2 = 2.25A2, respectively. If the government issues each firm tradeable pollution permits such that each has to abate 10 units of pollution, then, based on this allocation,
a. the two firms have no incentive to trade b. firm 1 has an incentive to buy a permit if the price is greater than $45 c. firm 2 has an incentive to buy a permit if the price is above $22.50 d. firm 2 will be willing to sell a permit if the price is above $22.50
Suppose you read in the Wall Street Journal that actual investment in Canada in 2003 was less than the intended investment Canadian businesses had hoped to make. You would conclude that in 2003, the level of inventories in Canada was
a. less than desired and that Canadian output rose b. less than desired and that Canadian output fell c. greater than desired and that Canadian output rose d. greater than desired and that Canadian output fell e. greater than desired but would be unable to tell what effect it had on Canadian output
The relationship between price and quantity supplied, ceteris paribus, is
A. quantity demanded. B. supply. C. equilibrium. D. demand.
Which of the following does not explain why the command systems of the Soviet Union and Eastern Europe failed?
A. The failure to use money for most exchanges. B. Coordination problems. C. Prices and profits did not fluctuate to reflect wants for a different allocation of resources. D. Incentive problems.