In a private closed economy where MPC = 0.8, if consumers reduce their spending by $10 billion and firms cut investments by $5 billion, then equilibrium GDP will decrease by:
A. $75 billion
B. $25 billion
C. $18.8 billion
D. $15 billion
A. $75 billion
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Internal economies of scale will ________ average cost when output is ________ by ________
A) reduce; increased; a firm B) increase; increased; a firm C) reduce; increased; the industry D) increase; increased; the industry E) reduce; reduce; the industry
An individual will never buy complete insurance if:
a. he or she is risk averse. b. insurance premiums are unfair. c. he or she is a risk taker. d. insurance premiums are fair.
Which of the following statements is correct?
a. All items that are included in M1 are included also in M2. b. All items that are included in M2 are included also in M1. c. Credit cards are included in both M1 and M2. d. Savings deposits are included in both M1 and M2.
From the Industrial Revolution to the present, innovation has played a major role in the growth of output. What do the leading analysts of economic growth argue were some of the most significant innovations of this period?
What will be an ideal response?