An aide to a U.S. Congressman computes the effect on aggregate demand of a $20 billion tax cut. The actual increase in aggregate demand is less than the aide expected. Which of the following errors in the aide's computation would be consistent with an overestimation of the impact on aggregate demand?
a. The actual MPC was larger than the MPC the aide used to compute the multiplier.
b. The aide thought the tax cut would be permanent, but the actual tax cut was temporary.
c. The increase in income shifted money demand less than the aide had anticipated.
d. The increase in income resulted in investment rising more than the aide had anticipated.
b
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A single-price monopolist will always produce where the elasticity of demand
A) is greater than 1. B) is smaller than 1. C) equals 1. D) equals infinity.
In the Keynesian DMP model
A) There is a fiscal multiplier. B) The government post vacancies in the labor market. C) There is no unemployment. D) There can be more than one wage consistent with equilibrium.
Law of Supply and Demand
What will be an ideal response?
Approximately what percentage of state spending goes to finance education?
A. 36. B. 44. C. 47. D. 53.