If the income multiplier is equal to 5, then a $1 initial increase the country's exports will lead to a
a. 5 percent decrease in national income
b. 5 percent increase in national income
c. $5 decrease in national income
d. $5 increase in national income
e. 0.05 percent increase in national income
D
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Production is efficient if the economy is producing at a point
a. on the production possibilities frontier. b. outside the production possibilities frontier. c. on or inside the production possibilities frontier. d. inside the production possibilities frontier.
Which of the following ideas is the most plausible?
a. Reducing a high tax rate is less likely to increase tax revenue than is reducing a low tax rate. b. Reducing a high tax rate is more likely to increase tax revenue than is reducing a low tax rate. c. Reducing a high tax rate will have the same effect on tax revenue as reducing a low tax rate. d. Reducing a tax rate can never increase tax revenue.
If the economy is currently in a recessionary gap, the SRAS curve intersects the AD curve to the left of Natural Real GDP
Indicate whether the statement is true or false
A state of rational ignorance
A) is a reflection of too little education. B) makes sense only if information is a free good. C) exists only in ideal representative democracies. D) makes sense when the costs of becoming informed are greater than the benefits. E) none of the above