Suppose an initial increase in government expenditure increases output by $50,000. If the size of the multiplier is 2.5, the size of the initial increase in government expenditure was _____
Fill in the blank(s) with the appropriate word(s).
$20,000
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An increase in real GDP causes the demand for real money balances to
A) rise. B) fall. C) remain unaffected. D) rise, fall, or remain unaffected depending on the interest rate at the time.
A fallacy of composition is to assume that
a. you can determine the composition of a complex product just by examining its exterior properties b. consumer durable goods today do not last as long as they did a generation ago c. any mistakes made in producing a product using an assembly line technique will lead to a compounding of errors as the product moves down the line d. what is true for any individual component in a group is true for the group as a whole e. when I was young I liked cotton candy, but now that I'm older I no longer like it
An interest in being reelected encourages politicians to support policies that
What will be an ideal response?
When considering outsourcing, most laypeople:
A. oppose it because of the visible loss of jobs. B. support it because they enjoy lower consumer prices. C. recognize its benefits to raising foreign wages. D. recognize it frees resources for other jobs for which the U.S. has a comparative advantage.