In the short run, the impact of a $50 billion spending package on GDP will be
a. greater than $50 billion because of the multiplier effect
b. less than $50 billion because of the tax code
c. greater than $50 billion because of the tax code
d. exactly $50 billion
e. greater than $50 billion because of crowding out
A
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The leader of Atlantis hires you as an economic consultant. He is concerned that the output level in Atlantis is too low and that this will cause prices to fall. He feels that it is necessary to increase output by $200 billion. He tells you that the MPC in Atlantis is 0.8. Which of the following would be the best advice to give to the Atlantis president?
A. increase government spending by $200 billion B. reduce government spending by $100 billion C. increase government spending by $100 billion D. decease taxes by $50 billion
In the above scenario, the profit of the company will
a. increase. b. decrease. c. remains the same. d. may increase or decrease.
What is true of both expansions and recessions?
a. There is a poorer than normal match between workers and their jobs. b. The labor market clears. c. The economy operates at its potential output. d. Cyclical unemployment is zero. e. None of the above.
If the United States imposed higher tariffs and more restrictive quotas that reduced imports,
A) employment in the U.S. would be higher. B) the wage rates of U.S. workers would be higher. C) the U.S. would gain at the expense of other countries. D) the U.S. would not gain at the cause expense to other countries.