Assuming MPC is 0.90, what effect, if any, would a change in U.S. net exports of minus $20 billion have on the U.S. level of national income?
a. No effect since the goods would be consumed abroad
b. National income increases by $200 billion
c. National income decreases by $200 billion
d. National income increases by $20 billion
e. National income decreases by $20 billion
C
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If there is increasing opportunity cost, then when moving downward on a production possibilities frontier, the opportunity cost of the good on the horizontal axis ________ as more of the good is produced
A) increases and the PPF gets steeper B) increases and the PPF gets flatter C) decreases and the PPF gets steeper D) decreases and the PPF gets flatter E) does not change and the PPF gets steeper
If the actual rate of unemployment equals the natural rate of unemployment, then:
A. potential output equals real GDP. B. potential output is greater than real GDP. C. potential output is less than real GDP. D. there is a recessionary gap.
Exhibit 14-8 Aggregate demand and supply
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In Exhibit 14-8, if aggregate demand shifts from AD1 to AD3,
A. real GDP will increase from $3.0 to $4.0, and the price level will increase from 100 to 140. B. real GDP will increase from $3.0 to $7.0, and the price level will increase from 100 to 140. C. real GDP will increase from $3.0 to $4.0, and the price level does not change. D. real GDP will increase from $3.0 to $7.0, and the price level will increase from 100 to 120.
Expansionary monetary policy involves an increase in the money supply and a fall in interest rates, leading to a positive expansion in income
Indicate whether the statement is true or false