If the MPC equals 0.80, a $200 billion tax decrease will increase consumption in the first round by
A. $200 billion.
B. $40 billion.
C. $100 billion.
D. $160 billion.
Answer: D
You might also like to view...
If 20% increase in the price of a good leads to a 60% decrease in the quantity demanded, then what is the price elasticity of demand?
A. 1/3. B. 30. C. 3. D. 1/6.
If general tax revenues were used to subsidize production of toothpicks, the government's actions would have
a. widespread benefits and costs b. widespread costs and concentrated benefits c. concentrated benefits and costs d. widespread benefits and concentrated costs e. widespread benefits and either widespread or concentrated costs
Brittany decides to save $50 from each paycheck so that she can go on a Spring Break trip with her college roommates. However, when she gets paid this week, she spends all of her money on new clothes. Which of the following insights into human behavior does Brittany exhibit?
a. People are overconfident. b. People care about fairness. c. People are reluctant to change their minds. d. People are inconsistent over time.
What usually happens after an adverse supply shock?
What will be an ideal response?