If the marginal propensity to consume in a country is 0.6, then a $4,000 decrease in taxes will lead to a _____ in real GDP
a. $4,000 decrease
b. $6,000 increase
c. $4,000 increase
d. $6,000 decrease
b
You might also like to view...
A monetary system is preferable over the barter system because it
A) is easier to track by the government. B) limits cash leakages. C) reduces transaction costs. D) is determined by the Congress.
The largest trading partner of Mexico is
a. Canada. b. the United States. c. Brazil. d. Cuba.
A growth recession occurs when
a) there are two successive quarters of negative GDP growth b) economic growth is so rapid that it creates inflation c) real GDP is growing but nominal GDP is not d) potential GDP declines e) GDP grows at a slower rate than its long run trend
An unexpected ________ in inventories has ________ effect on future production.
A. increase; no B. increase; a positive C. decrease; a positive D. decrease; no