If Oscar's MPC is 0.95 and he earns an additional $2,000, how much would he spend?
a. $100
b. $1,900
c. $2,105
d. $40,000
b
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If the money supply is $200 million, the reserve requirement is 20%, and currency holding $10 million, then reserves are
a. $10 million. b. $40 million. c. $30 million. d. $40 million. e. none of the above
When the price of a good increases, the budget constraint shifts in parallel to the original budget constraint.
Answer the following statement true (T) or false (F)
The experience with development policy over the last several decades now allow us to
a. predict the result of any country's policies b. establish the right mix of government and private sector c. be more confident about what issues are important and what directions to take d. show how one country's success can be repeated by another country e. we have not learned any good general lessons from experience
With a decrease in government expenditure we
A) move up along the aggregate demand curve. B) move down along the aggregate demand curve. C) shift the aggregate demand curve to the right. D) shift the aggregate demand curve to the left.