The above table presents data from the nation of Pacifica. When real GDP equals $2.0 trillion, aggregate planned expenditure equals
A) $3.75 trillion. B) $5.00 trillion. C) $5.50 trillion. D) $4.00 trillion. E) $6.00 trillion.
B
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Inferior goods have an income elasticity of demand that is
a. positive b. negative c. 0 d. greater than 1 in absolute value e. equal to 1 in absolute value
Over a ten year period, the monthly charge for cellular phone service decreased from $120 per month to $30 per month. At the same time, the number of subscribers increased from less than 10 million to more than 75 million. Which of the following provides the best explanation for these changes?
a. An increase in consumer income over this ten year period b. A reduction in the price of residential phone service, a substitute for cellular phone service c. An increase in the wages of workers in the cellular phone industry d. Technological improvements that reduced the cost of supplying cellular phone service
When national income increases from $300 billion to $400 billion, national consumption increases from $300 billion to $360 billion. At Y = $400 billion, the MPC is
a. 0.2 b. 0.5 c. 0.6 d. 0.67 e. 1.33
The budget constraint illustrates all of the combinations of goods and services that the consumer can afford
a. True b. False Indicate whether the statement is true or false