If the MPC is 0.5, and the government cuts spending by $400b, the overall effect on GDP will be:
A. a decrease of $800b.
B. a decrease of $400b.
C. an increase of $800b.
D. an increase of $400b.
Answer: A
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When the expenditure approach is used to measure GDP, the major components of GDP are
a. consumption, investment, indirect business taxes, and depreciation. b. employee compensation, rents, interest, self-employment income, and corporate profits. c. employee compensation, corporate profits, depreciation, and indirect business taxes. d. consumption, investment, government consumption and gross investment, and net exports.
When the cross elasticity of demand is _________, the goods or services are _________.
A. zero; substitutes B. negative; substitutes C. positive; complements D. positive; substitutes
Total profit (or loss)
A. is the rectangle bounded by OMGS.
B. is the rectangle bounded by OKER.
C. is the rectangle bounded by LMGF.
D. None of the choices are correct.
Torrie is thinking of starting up a small business selling hand-painted wine glasses. She is considering setting up her business as a sole proprietorship. What is one disadvantage to Torrie of setting up her business as a sole proprietorship?
A) As a sole proprietor, Torrie would be taxed twice. B) As a sole proprietor, Torrie would not have control of the business. C) As a sole proprietor, Torrie would face unlimited liability. D) As a sole proprietor, Torrie would be subject to significant rules and regulations.