Exhibit 9-5 Keynesian aggregate expenditures model where the MPC is 0.75
?
To eliminate the GDP gap shown in Exhibit 9-5, the government should cut its spending by:
A. $0.5 trillion.
B. $1 trillion.
C. $1.5 trillion.
D. $2 trillion.
Answer: A
You might also like to view...
In the above figure, the deadweight loss is zero if output is
A) 0 units. B) 10 units. C) 20 units. D) 30 units.
Which of the following causes an increase in demand for a normal good?
A) increase in the price of a substitute B) increase in the price of a complement C) decrease in price D) decrease in income
The degree to which an asset can be acquired or disposed of without much danger of any intervening loss in nominal value is known as
A) transaction deposits. B) a time deposit. C) liquidity. D) M2.
One of the reasons communism failed was because:
a. governments ran out of money. b. workers received the same pay whether or not they worked hard. c. there was no unemployment. d. Mao Zedong passed away. e. technological improvements were impossible in a communist economy.