The multiplier-accelerator model
A) suggests that a downturn in real GDP will lead to a sharp fall in investment, which leads to further reductions in GDP through the multiplier.
B) emphasizes that current investment spending depends negatively on the expected future growth of GDP.
C) links investment spending to stock prices.
D) emphasizes the role of real interest rates and taxes.
A
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Explain whether you would expect the elasticity of supply to be highly elastic or inelastic for fresh cut flowers and why
What will be an ideal response?
If an economy saves 20 percent of any increase in real Gross Domestic Product (GDP), then an increase in investment of $2 billion can produce an increase in real Gross Domestic Product (GDP) of as much as
A) $2 billion. B) $10 billion. C) $0.4 billion. D) $1.6 billion.
A decrease in the money supply
a. lowers the interest rate, causing a decrease in investment and a decrease in GDP. b. lowers the interest rate, causing a decrease in investment and an increase in GDP. c. raises the interest rate, causing an increase in investment and a decrease in GDP. d. raises the interest rate, causing an increase in investment and an increase in GDP. e. raises the interest rate, causing a decrease in investment and a decrease in GDP.
The government imposed a tax that reduced total consumer and producer surplus by five million dollars, resulting in a deadweight loss of one million dollars. How much tax revenue went to the government?
a. 11 million dollars b. 6 million dollars c. 4 million dollars d. 1 million dollars