If government increases its tax revenues by $15 billion and the MPC is 2/3, then we can expect the equilibrium GDP to:
A. decrease by $30 billion.
B. decrease by $45 billion.
C. decrease by $35 billion.
D. decrease by $55 billion.
A. decrease by $30 billion.
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It is conceivable that the APC, APS, MPC, and MPS could simultaneously be
A) APC = 1.0; APS = 0; MPC = 1.0; MPS = 0.15. B) APC = 1.0; APS = 0.1; MPC = 0.8; MPS = 0.25. C) APC = 1.3; APS = -0.3; MPC = 0.9; MPS = 0.1. D) APC = 0.8; APS = 0.2; MPC = 1.1; MPS = 0.1.
The circular flow shows that
A) aggregate production equals aggregate expenditure. B) aggregate expenditure is less than aggregate income. C) GDP equals aggregate income. D) Both answers A and C are correct.
Ireland's nominal GDP can increase when
a. only Irish prices increase b. only Irish output increases c. only Irish output and prices increase d. only Irish output and prices decrease e. any combination of Irish output and/or prices increases
Refer to the accompanying figure. Growing 1,000 bushels of wheat and no bushels of corn each year is:
A. efficient and attainable. B. inefficient but attainable. C. inefficient and unattainable. D. efficient but unattainable.