Calculate the total change in aggregate demand because of an initial $300 decrease in investment spending, given that C = 150 + 0.50YD.
A. $300 decrease.
B. $150 decrease.
C. $600 decrease.
D. $1,200 decrease.
Answer: C
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Suppose the market for autoworkers is initially in equilibrium, but then the automakers purchase capital goods that are a substitute for workers. What happens in the market for autoworkers?
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Which of the following would not be considered an indirect tax?
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A) rises and then falls. B) remains constant since fixed costs are constant. C) decreases. D) decreases up to a particular level of output and then increases.