If the marginal propensity to consume is 0.75 and the equilibrium national income level is $500 billion, then a $25 billion increase in aggregate expenditure will cause the aggregate expenditure curve to shift
a. downward and national income to decrease by $33.3 billion
b. upward and national income to increase by $33.3 billion
c. downward and national income to increase by $25 billion
d. upward and national income to increase by $100 billion
e. upward and national income to decrease by $100 billion
D
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Double markup problems arise because
a. upstream firms have no market power b. downstream firms have no market power c. upstream and downstream products are unrelated in demand d. upstream and downstream firm's pricing decisions tend to decrease the demand for the other product
From 2004 to 2008, the federal budget deficit, on an official fiscal-year basis was
a. large and growing larger. b. "negative," that is, the budget was in surplus. c. declining. d. increased by the rising Social Security deficit.
Consider a $2 billion open market purchase of U.S. Treasury securities by the Federal Reserve. The Banking System's balance sheet will specifically show:
A. no net change in assets or liabilities, only a change in the composition of assets with securities increasing and reserves decreasing by $2 billion respectively. B. only an increase in liabilities of $2 billion. C. only a decrease in assets of $2 billion. D. no net change in assets or liabilities, only a change in the composition of assets with securities decreasing and reserves increasing by $2 billion respectively.
Externalities involve the imposition of costs or benefits on parties outside an activity or transaction.
Answer the following statement true (T) or false (F)