The desired tax cut to close a GDP gap is given by
A. Desired fiscal stimulus × MPC.
B. Desired fiscal stimulus ÷ MPC.
C. AD shortfall × MPS.
D. AD shortfall ÷ MPC.
Answer: B
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Refer to the figure above. Social surplus will be maximized if the quantity supplied of Good X is ________
A) Q1 B) Q2 C) greater than Q1 D) greater than Q2
A Canadian oil company hires geological survey services from the United States. If all else remains equal, this will
A) increase the financial account. B) decrease the current account balance. C) increase the balance of trade. D) increase net exports.
For price discrimination to exist, all of the following are necessary EXCEPT
A) a downward sloping demand curve. B) an identifiable group of buyers with different elasticities of demand. C) an upward sloping marginal cost curve. D) there can be no resale of the product.
If an economy at the equilibrium level of GDP experiences an increase in the amount of investment spending, then inventories will be
A. depleted, causing firms to cut production. B. accumulated, causing firms to cut production. C. depleted, causing firms to increase production. D. accumulated, causing firms to expand production.