Suppose that the MPC out of disposable income was 0.8 and the tax function for a given economy was T = – 30 + 0.25Y
An increase in the intercept of the tax function of 10 units (from – 30 to – 20) would cause equilibrium income in the simple Keynesian model to fall by a. -20 units.
b. 10 units.
c. 20 units.
d. 40 units.
C
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Classical macroeconomic theorists believed that if there were more workers who wanted to work than there were firms who wanted to hire them, then wages would ________.
A. not change B. rise slowly C. resist falling D. fall quickly
The development of new products through research and development in new growth theory is important because
A) new patents are created. B) there can be a positive impact on future growth. C) society's scarce resources are being used when they could be used for current consumption. D) it will lead to a reduction in the savings rate.
The number of people living in urban areas fell after the Civil War and then increased as World War I approached
Indicate whether the statement is true or false
Higher interest rates tend to increase the demand for money.
a. true b. false