Refer to Figure 23-3. Suppose that investment spending decreases by $5 million, decreasing aggregate expenditure and decreasing real GDP from GDP2 to GDP1. If the MPC is 0.8, then what is the change in GDP?
A) -$4 million B) -$5 million C) -$25 million D) -$40 million
C
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The term "depository institution" refers to
A) savings and loan associations only. B) commercial banks, credit unions, and savings and loan associations. C) credit unions only. D) commercial banks only.
Arguments for the balanced budget amendment include all of the following EXCEPT
A) a balanced budget amendment would limit Congress from using fiscal policy during a recession. B) a balanced budget amendment would increase capital formation. C) a balanced budget amendment would reduce the taxation burden on future generations. D) a balanced budget amendment would exert fiscal discipline on the federal government.
One macroeconomic goal is to achieve an unemployment rate of zero
a. True b. False
If the price of a good decreases by 5% and the quantity demanded remains unchanged, then at that price, the good is
A. elastic. B. perfectly elastic. C. inelastic. D. perfectly inelastic.