If a $10 billion decrease in lump-sum taxes increases equilibrium GDP by $40 billion, then:

A. the multiplier is 4.
B. the MPC for this economy is .8.
C. the MPC for this economy is .6.
D. the multiplier is 3.


B. the MPC for this economy is .8.

Economics

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Assume a country produces two types of goods: manufactured goods and agricultural goods. When this country experiences economic growth, we know that

A) the production possibilities curve will shift inward. B) there will be movement along the curve toward more agricultural goods. C) there will be a movement along the curve toward more manufactured goods. D) the production possibilities curve will shift outward.

Economics

Suppose that IS and LM intersect at full-employment output. A rightward shift of LM will be followed by a __________ price level that shifts LM to the __________ in a return to full employment

A) rising; right B) rising; left C) falling; right D) falling; left

Economics

According to the text, the procedure of "anchoring and adjustment:"

A. describes people who are dogmatic in their views but change when new data comes. B. often leads to biased estimates. C. usually leads to correct estimates without rational calculations. D. explains why people tend to succeed at new business ventures.

Economics

Using a PPC can help to increase a company's

a. efficiency b. underutilization c. losses d. employee theft

Economics