In an economy, the government wants to increase aggregate demand by $50 billion at each price level to increase real GDP and reduce unemployment. If the MPS is 0.4, then it could increase government spending by:
A. $10 billion
B. $20 billion
C. $31.25 billion
D. $40.50 billion
B. $20 billion
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The currency exchange rate is the rate at which one nation's currency can be exchanged for another
Indicate whether the statement is true or false
Table 10.1 shows the cash flows and discounted cash flows for three mutually exclusive projects available to a company. Assume an interest rate of 5%. Which project should the company choose if they want to recover their initial investment as soon as possible?
A. Project A
B. Project B
C. Project C
D. It cannot be determined from the information given.
Movements up along a particular short run Phillips curve are not consistent with: a. Increases in aggregate demand
b. Movements up along the short run aggregate supply curve. c. Shifting inflationary expectations. d. Movements up along a particular short run Phillips curve are consistent with all of the above.
Suppose Congress consists of 5 people who want to spend X% on national defense. Let their preferences be as follows: 1, 3, 20, 21, 25. What amount will most likely be spent?
A. 14 B. 21 C. 20 D. 3