Imagine that the U.S. economy is in equilibrium at full employment without inflation where national income is at $6,700 billion. The MPC = 0.8 . If massive flooding along the Mississippi River leads Congress to approve a spending package of $10 billion to aid flood victims, the government must also take which of the following actions to keep the economy in equilibrium at full employment without
inflation?
a. increase taxes by $10 billion
b. decrease taxes by $10 billion
c. cut other government spending programs by $7.5 billion
d. increase taxes by $12.5 billion
e. decrease taxes by $12.5 billion
D
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At one time, people living in the U.S. were imprisoned or fined for not having legitimate work
Indicate whether the statement is true or false
In the probit model Pr(Y = 1 = ?(?0 + ?1X), ?
A) is not defined for ?(0). B) is the standard normal cumulative distribution function. C) is set to 1.96. D) can be computed from the standard normal density function.
Antitrust law
a. protects consumers from fraud or similar harm b. helps define resource ownership c. is designed to enforce contracts d. helps prevent firms from limiting competition e. cannot be used to increase economic efficiency
Lower taxes on businesses will shift the aggregate:
A. demand curve rightward. B. demand curve leftward. C. supply curve rightward. D. supply curve leftward.