In a certain economy, when income is $400, consumer spending is $325 . The value of the multiplier for this economy is 3.33 . It follows that, when income is $450, consumer spending is
a. $360 . For this economy, an initial increase of $50 in consumer spending translates into a $266.67 increase in aggregate demand.
b. $360 . For this economy, an initial increase of $50 in consumer spending translates into a $166.50 increase in aggregate demand.
c. $341.67 . For this economy, an initial increase of $50 in consumer spending translates into a $266.67 increase in aggregate demand.
d. $341.67 . For this economy, an initial increase of $50 in consumer spending translates into a $166.25 increase in aggregate demand.
b
You might also like to view...
Two businesses coming together to form a single company is known as? a(n) __________.
A. hostile takeover B. acquisition C. leveraged buyout D. joint venture E. merger
The short-run aggregate supply curve would shift and the long-run aggregate supply curve would remain fixed if
A) there was a temporary shock that influenced the supply side. B) there was a permanent increase in aggregate demand along with a permanent decrease in aggregate supply. C) there was a permanent increase in aggregate demand. D) there was a temporary shock to aggregate demand.
An individual's demand curve for a good is derived by
a. varying the income level and observing the resulting total utility derived from both goods b. varying the price of one good and observing the resulting quantities demanded of the other good c. varying the prices of both goods and observing the changes in quantities demanded of both goods d. shifting the budget line to the left and calculating the loss in total utility e. varying the price of one good and observing the resulting quantities demanded of that good
In the table below, the capital stock is fixed at 40 units, the price of capital is $15 per unit, and the price of labor is $80 per unit. 
How much does the 50th unit of output add to the firm's total cost?
A. $400 B. $600 C. $10 D. $6.67 E. none of the above