Assume the MPC is 0.8 . Assuming only the multiplier effect matters, a decrease in government purchases of $100 billion will shift the aggregate demand curve to the
a. left by $180 billion.
b. left by $500 billion.
c. right by $180 billion.
d. right by $400 billion.
b
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At the national level, higher saving rates lead to ________ and higher standards of living.
A. greater investment B. slower growth C. greater current consumption D. crowding out
Refer to Figure 11.5. An increase in exports is best illustrated by diagram
A) A. B) B. C) C. D) D.
If the value of the price elasticity of demand is -0.2, this means that a
a. 20 percent decrease in price causes a 1 percent increase in quantity demanded b. 0.2 percent decrease in price causes a 1 percent increase in quantity demanded c. 5 percent decrease in price causes a 1 percent increase in quantity demanded d. 0.2 percent decrease in price causes a 0.2 percent increase in quantity demanded e. 100 percent decrease in price causes a 200 percent increase in quantity demanded
Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________, 
A. Rising; B; C B. Falling; A; C C. Falling; A; B D. Rising; A; C