Suppose government finds it can increase the equilibrium real GDP $45 billion by increasing government purchases by $18 billion. On the basis of this information, we can say that the:

A. MPS in this economy is .4.
B. MPC in this economy is .4.
C. multiplier does not apply in this economy.
D. multiplier is 3.


A. MPS in this economy is .4.

Economics

You might also like to view...

Risk assessment involves

a. balancing the costs and benefits of environmental hazards. b. an evaluation of the risk caused by exposure to an environmental hazard c. minimizing the costs of meeting an environmental objective d. eliminating all environmental risks e. none of the above

Economics

If AVC=$15 and AFC=$10, then ATC=

a. $10 b. $5 c. $15 d. $25

Economics

To fully understand how taxes affect economic well-being, we must compare the

a. benefit to buyers with the loss to sellers. b. price paid by buyers to the price received by sellers. c. profits earned by firms to the losses incurred by consumers. d. decrease in total surplus to the increase in revenue raised by the government.

Economics

A constant-cost industry is one in which:

A. the demand curve is horizontal. B. the long-run supply curve is horizontal. C. the short-run supply curve is horizontal. D. All of these

Economics