Ceteris paribus, if the government transfers income from individuals with a high MPC to those with a low MPC, in the short run, spending and output will:
A. Increase.
B. Decrease.
C. Stay the same.
D. Increase or decrease depending on the level of saving.
B. Decrease.
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The government’s budget accounts for about 80 percent of GDP in the United States.
Answer the following statement true (T) or false (F)
If there is an inflationary gap, what is the proper monetary policy to restore price stability? What actions can the Fed undertake to restore price stability?
What will be an ideal response?
In 2006, before the start of the recession, the employment—population ratio was 63.4 percent. In August 2015, more than six years after the end of the recession, the ratio
A) was still only 59.4 percent. B) was back to its 2006 level. C) had increased to 72.3 percent. D) was still 50 percent lower than the ratio in 2006.
A decrease in demand and an increase in supply will lead to
A) unambiguous increases in both price and quantity. B) unambiguous decreases in both price and quantity. C) an unambiguous decrease in price, but the effect on quantity is indeterminate. D) an unambiguous decrease in quantity, but the effect on price is indeterminate.