An increase in government expenditures by $100 (unmatched by an increase in taxes) would, if the MPC = 0.9, result in an increase in national income by
a. $1,000
b. $9,000
c. $900
d. $190
e. inadequate information is given
A
You might also like to view...
Over the past 50 years, deaths among children have
A) declined in most high-income countries and have remained relatively unchanged in most low-income countries. B) declined in nearly all countries, including most low-income countries. C) declined in most high-income countries and have risen in most low-income countries. D) remained relatively unchanged in most high-income countries and have declined in most low-income countries.
Empirical research indicates that the expansion of Medicaid has led to a number of unintended consequences including
a. an increase in the incidence of low-birth weight babies among participants. b. fewer pregnant women seeking prenatal care. c. an increase in the birthrate among the eligible population. d. all of the above.
A business spends $10 million on new capital equipment, and during the same year, $7 million of its existing capital wears out. Which of the following is correct?
a. The firm's gross investment is $7 million, and its net investment is $10 million. b. The firm's gross investment is $3 million, and its net investment is $7 million. c. The firm's gross investment is $7 million, and its net investment is $3 million. d. The firm's gross investment is $10 million, and its net investment is $3 million.
When a tax is proportional, the average tax rate:
A. first increases with income, then decreases with income. B. is constant with income. C. decreases with income. D. increases with income.