If an economy consumes 75 percent of any increase in real GDP and spends 10 percent of this increased income on imports, then a decline in government spending by $60 million will result in a total reduction in equilibrium income of:
a. $171.43 million.
b. $123.47 million.
c. $151.63 million.
d. $73.47 million.
e. $71.43 million.
a
You might also like to view...
Citizens have a strong incentive to monitor local government because _____
a. as citizens it is their duty to do so b. the level of government services directly affects their utility because they consume them every day c. it is easy to observe the level and quality of nearby governments d. the cost and quality of local government services are reflected in housing prices
Which of the following could explain a decrease in labor supply to a particular labor market?
a. an increased preference for this type of work b. a decrease in the size of the population c. an increase in the number of firms in the market d. a leftward shift of the marginal revenue product curve of labor at a typical firm e. a reduction in wages rates for similar types of work
If the number of unemployed is greater than the number of employed, the unemployment rate is
A. over 100%. B. more than 50%. C. less than 50%. D. None of the choices are correct.
Which of the following factors would indicate a less elastic demand?
A. The good represents a large fraction of the budget. B. Demand is measured over a longer period of time. C. There are few substitutes. D. The price of the good is high.