If government spending increased by $50 billion and the MPC within the economy was 0.8, what would be the total impact on real GDP?
a. $62.5 billion decrease
b. $62.5 billion increase
c. $250 billion decrease
d. $250 billion increase
d
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If demand is unit elastic, then a 10 percent increase in the price will lead to a 10 percent increase in quantity demanded.
Answer the following statement true (T) or false (F)
Suppose the current account of a country is initially in balance. A new transaction occurs so that the current account is now in surplus. Official reserve balance is maintained before and after the transaction occurs. From this, we know that
A) the balance of trade is now in surplus. B) the balance of goods and services is now in surplus. C) the capital account is now in deficit. D) the government must make official reserve transactions.
If a firm sells a total of 100 shares of stock, then
a. the supply of, and demand for, those shares determine the price per share. b. each share represents ownership of 1 percent of the firm. c. the firm is engaging in equity finance. d. All of the above are correct.
Aggregate Supply increases when
A. government regulations proliferate. B. raw materials' prices rise. C. wages fall. D. wages rise.