Use the aggregate expenditures model and assume the marginal propensity to consume (MPC) is 0.80 . An increase in government spending of $1 billion would result in an increase in GDP of:
a. $0.
b. $0.8 billion.
c. $1.0 billion.
d. $5.0 billion.
e. $8.0 billion.
d
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Assume that the user cost of capital (C) is simply
where r is the after tax rate of return, ? is the depreciation rate, ? is the corporate tax rate and,
r is the individual tax rate. Now assume further that the after-tax rate of return is 10 percent
and the economic depreciation rate is 2 percent. The firm faces corporate taxes of 35 percent
with an individual tax rate of 25 percent. What is the user cost of capital in this case?
Which of the following statements is true concerning the trend in hospital care between in-patient and out-patient services since the mid-1980s?
a. Both have been declining. b. Out-patient services have been static while in-patient services have been declining. c. Out-patient services have increased substantially because admissions are down. d. Both have been growing. e. There has been no noticeable trend in either in-patient or outpatient services.
If a firm produces nothing, it still incurs its fixed costs
a. True b. False Indicate whether the statement is true or false
Which of the following activities does the International Monetary Fund engage in?
A. Regulation of large international banks B. Creation of special drawing rights C. Provision of financial services to large international banks D. Promotion of international trade by lowering tariffs and nontariff barriers