Suppose that income taxes are increased by $600 billion. If the marginal propensity to consume is 0.75 and the spending multiplier is 4, by how much will the aggregate demand curve shift at a given price level?
A) $2,400 billion
B) $1,800 billion
C) $600 billion
D) $450 billion
Ans: B) $1,800 billion
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A difference between a perfectly competitive industry and a monopoly is that
A) in the long run, firms in a perfectly competitive industry make zero economic profit and a monopoly can make an economic profit. B) a firm in a perfectly competitive industry can perfectly price discriminate but a monopoly cannot. C) only monopolies have an incentive to maximize profit. D) perfectly competitive firms can have a public franchise. E) a barrier to entry protects perfectly competitive firms in the short run and protects a monopoly in the long run.
Using potentially productive resources to try and obtain transfers from the government is called _____
a. vote trading b. logrolling c. agenda control d. rent seeking
It is reasonable to expect that if one firm in an oligopolistic market raises price, the its competitors will do the same so that all firms can earn increased revenues
Indicate whether the statement is true or false
Imports are goods and services that are produced:
A. in other countries and consumed domestically. B. domestically and consumed in other countries. C. and consumed in other countries. D. and consumed domestically.