Assume that the MPC is 0.75 and that the price level is "sticky". If the Federal Reserve increases the money supply and investment spending increases by $8 billion, then aggregate demand is likely to:
A. Increase by $6 billion
B. Increase by $8 billion
C. Increase by $32 billion
D. Decrease by $8 billion
C. Increase by $32 billion
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If the local airport decides to pay monetary compensation to the people on whom the airport's operation has imposed costs, it should compensate the people who
A) currently live nearby. B) currently live nearby and are also tenants. C) currently live nearby and also own the residences in which they live. D) owned nearby residences when the airport was built. E) owned nearby residences when the airport was built and who have not been able to sell their residences since the construction of the airport.
A tax of 20 percent per unit of imported garlic is an example of a(n)
A) specific tariff. B) ad valorem tariff. C) nominal tariff. D) effective protection tariff. E) a disadvantageous tariff
When a country has flexible exchange rates the:
a. Reserves account must equal zero. b. Reserves account must be positive. c. Reserves account must be negative. d. Current account must equal minus the reserves account. e. Reserves account can be positive or negative.
The largest component of U.S. GDP is:
A.) Government services at the federal, state and local levels combined. B.) Business investment. C.) Household consumption. D.) Net exports.