If the marginal propensity to consume (MPC) is 0.75, a $50 decrease in government spending, other things being equal, would cause equilibrium real GDP to:
A. increase by $50.
B. decrease by $50.
C. increase by $200.
D. decrease by $200.
Answer: D
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If the dollar price of the yen is 1.39, the reciprocal exchange rate is 1 yen = $0.39
a. True b. False Indicate whether the statement is true or false
Which of the following is a partially valid economic argument for restricting free trade?
a. Restrictions on foreign trade will increase employment and permanently reduce unemployment. b. Infant industries may need temporary protection to develop and gain productive efficiency. c. A nation needs to protect its national defense; hence, it should restrict some products that threaten an industry considered vital to its defense. d. Both b and c are correct.
All economists agree that the European Union is an example of a true a optimal currency area
Indicate whether the statement is true or false
The price elasticity of demand for senior citizens purchasing coffee from McDonald's is ?5, while non-senior citizens have a price elasticity of demand equal to ?1.25. If it costs McDonald's $0.02 to produce a coffee, the optimal price for a cup of coffee for senior citizens and the resultant marginal cost under third-degree price discrimination are, respectively:
A. $0.025 and $0.02. B. $0.02 and $0.80. C. $0.016 and $0.20. D. $0.10 and $0.02.