If the government wishes to decrease GDP by $2,000b, and the MPC is 0.6, it should:
A. increase its spending by $800b.
B. decrease its spending by $800b.
C. decrease its spending by $1,200b.
D. increase its spending by $1,200b.
Answer: B
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Which of the following statements concerning utility is correct?
a. It is possible to precisely measure the utility an individual receives from consuming a particular good or service b. It is always possible to determine whether Dalene or Juloy gets more utility from consuming two units of the same good c. The utility of goods can be measured while the same is not true for services d. Utility is a subjective measure of satisfaction an individual receives from consuming a good or service e. It is only useful if there is no scarcity
Which term means legislative spending that benefits a single political district?
a. Budget trading b. Vote cycling c. Logrolling d. Pork-barrel spending
If the Fed sells government bonds, bank reserves will
A) decrease leading to a decrease in the money supply. B) increase leading to a decrease in the money supply. C) increase leading to an increase in the money supply. D) decrease leading to an increase in the money supply.
If Mexico experiences a period of stable prices while the United States experiences rapid inflation, what will happen in the United States?
A. An increase in U.S. imports B. An increase in U.S. exports C. A decrease in U.S. imports D. An increase in U.S. net exports