Suppose the MPC is .6 and consumption increases by $6 billion. Consequently, total income through the multiplier effect will:
a. Increase by $12 billion
b. Decrease by $15 billion
c. Increase by $15 billion
d. Increase by $10 billion
c. Increase by $15 billion
You might also like to view...
Homer's Holesome Donuts has determined that its profit-maximizing quantity is 10,000 donuts per year. Homer's earns $12,000 in revenue from the sale of those donuts. Homer's has two costs
First he pays $16,000 in annual rental payments for its five-year lease on its store. Second Homer incurs an additional cost of $5,000 for ingredients. Should Homer's shut down in the short run? A) Yes, because he is incurring an economic loss. B) Yes, because he cannot cover all of his fixed costs. C) No, because is making positive economic profit. D) No, because he can cover all of his variable costs.
Cases involving unequal pay for equal work and unequal access to promotion are monitored by:
a. the Council of Economic Advisors. b. the Equal Employment Opportunity Commission. c. the Federal Trade Commission d. the Social Security Administration.
When customers buy the exact amount of goods that producers are selling at a specific price, the __________ price exists.
A. market B. equilibrium C. unit D. production
Suppose that average labor productivity in Country C is $6,000, and that Countries C and A have the same real GDP per capita. Based on the information in the table, what must be the average labor productivity in Country A?CountryPopulation (millions)Share of Population Employed (%)A10060B15055C7550D25045E9540
A. $1,800 B. $5,000 C. $2,400 D. $7,200