If businesses spend an additional $150 billion for investment projects in 2010, what will be the impact on national income (Y) if the multiplier is 2?
a. Y will increase by $50 billion.
b. Y will increase by $150 billion.
c. Y will increase by $300 billion.
d. Y will increase by $450 billion.
c
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The Consumer Price Index (CPI) relies on the calculation of
A) prices of a variable basket of goods that changes frequently. B) prices of a fixed basket of goods that does not change often. C) the components of GDP that change annually. D) the components of GDP that do not change frequently.
When the price of Gatorade is $2 per bottle, the quantity demanded is 500 bottles per at the local grocer. When the price falls to $1 per bottle, the quantity demanded increases to 1000. Given this information, the demand for Gatorade is
A) inelastic. B) elastic. C) unit elastic. D) perfectly elastic.
A situation in which one party makes a contractual agreement with a second party in the expectation that the second party will act on its behalf is known as
a. an adverse selection relation b. a signaling relation c. an authority relation d. a principal-agent relation e. a nonmarket relation
Other things being equal, which market structure is most likely to yield the greatest industry long-run economic profit?
A. perfect competition B. monopolistic competition C. oligopoly D. monopoly