The recessionary expenditure gap associated with the recession of 2007-2009 resulted from:
A. the government's attempt to control hyperinflation.
B. a major increase in personal and corporate taxes.
C. a rapid decline in investment spending.
D. a rapid increase in imports resulting from large tariff reductions.
C. a rapid decline in investment spending.
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Refer to Figure 10-2. Which of the following is consistent with the graph depicted above?
A) New government regulations decrease the profitability of new investment. B) The government runs a budget surplus. C) An expected expansion increases the profitability of new investment. D) There is a shift from an income tax to a consumption tax.
Constant returns to scale exist over the range of output for which the long-run average cost is:
a. neither rising or falling. b. falling. c. rising. d. none of these.
A $100 billion decrease in government purchases would:
a. increase AD by $500 billion if MPC = 0.8. b. decrease AD by $300 billion if MPC = 2/3. c. increase AD by $200 billion if MPC = 0.5. d. decrease AD by $40 billion if MPC = 0.4.
Refer to Exhibit 6-1. Prices rose by __________ percent from Year 4 to Year 5.
a. 3.90 b. 3.75 c. 4.30 d. 5.90