If S = -50 + 0.4Y and I = 70, then the equilibrium level of income is
A. 180.
B. 300.
C. 420.
D. 450.
Answer: B
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Suppose real GDP is $13 trillion, potential real GDP is $13.5 trillion, and Congress and the president plan to use fiscal policy to restore the economy to potential real GDP. Assuming a constant price level, Congress and the president would need to
decrease taxes by A) $500 billion. B) less than $500 billion. C) more than $500 billion. D) None of the above are correct. Congress should raise taxes in this case.
Figure 2-7 Refer to Figure 2-7. What is the opportunity cost of moving from point L to point M?
a. 20 engines b. 20 engines and 15 tvs c. 15 tvs d. zero
Currently, total government expenditures in the United States:
a. are close to 40 percent of GDP. b. fell by half, to 10 percent of GDP. c. nearly doubled to about 60 percent of GDP. d. nearly tripled to about 60 percent of GDP.
At times, converging economies must live with a degree of uncertainty over inflation that would be politically unacceptable in the high-income economies.
Select whether the statement is true or false. A. True B. False