If the multiplier equals 2 and the AD shortfall is $6 million, the desired fiscal stimulus is
A. $12 million.
B. $333,333.
C. $6 million.
D. $3 million.
Answer: D
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According to supply-side advocates, the increase in government regulatory activity in the late 1960s slowed economic growth
a. by increasing the cost of producing a given output. b. by requiring capital formation that contributes to increased productivity in terms of measured output. c. only temporarily until there was an adequate adjustment period. d. Both a and b
Concerning tax rates and growth, which of the following is true?
A. Tax rates do not influence economic growth. B. Countries with high marginal tax rates have generally had higher rates of economic growth than those with low tax rates. C. Countries with low marginal tax rates have generally had higher rates of economic growth than those with high tax rates. D. Countries that impose high marginal tax rates at low-income thresholds generally have high rates of economic growth.
An increase in the money supply
a. lowers the interest rate, causing a decrease in investment and an increase in GDP. b. lowers the interest rate, causing an increase in investment and a decrease in GDP. c. lowers the interest rate, causing an increase in investment and an increase in GDP. d. raises the interest rate, causing an increase in investment and an increase in GDP. e. raises the interest rate, causing a decrease in investment and a decrease in GDP.
If employment grows faster than the population as a whole, then output per capita can increase faster than productivity per worker
Indicate whether the statement is true or false