Assume that GDP = $10,000 and the MPC = 0.75. If policy makers want to increase GDP by 30 percent, and they want to change taxes and government spending by equal amounts, how much would government spending and taxes each need to increase?
A) $300 B) $750 C) $1,000 D) $3,000
D
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The short-run Phillips curve always intersects the long-run Phillips curve at: a. Zero inflation
b. At an accelerating inflation rate. c. The expected inflation rate. d. The same rate over time.
Suppose a given basket of goods and services costs 9 dollars in Australia and 5,400 baht in Thailand. If the exchange rate is 600 baht per Australian dollar, purchasing power parity implies that the:
A. Australian dollar must appreciate to restore purchasing power parity. B. baht must depreciate to restore purchasing power parity. C. exchange rate has attained its long run equilibrium value. D. Australian dollar must depreciate to restore purchasing power parity.
When Natalie in New York buys stock in Hyundai in Korea, NCO:
A. increases. B. is unaffected. C. decreases. D. is zero.
A decrease in marginal tax rates will cause ________ in investment and a ________ shift in AS.
A. a decrease; leftward B. a decrease; rightward C. an increase; leftward D. an increase; rightward