Suppose the price level is fixed, the MPC is .5, and the GDP gap is a negative $100 billion. To achieve full-employment output (exactly), government should:
A. increase government expenditures by $100 billion.
B. increase government expenditures by $50 billion.
C. reduce taxes by $50 billion.
D. reduce taxes by $200 billion.
B. increase government expenditures by $50 billion.
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A country's labor demand curve shifted to the right after the adoption of a new technology. This implies that the use of the new technology ________, assuming all else equal
A) reduced the marginal product of labor B) lowered the minimum wage that firms need to pay C) increased the minimum wage that firms need to pay D) increased the marginal product of labor
Necessities tend to have more inelastic demands than luxuries
Indicate whether the statement is true or false
According to the Law of Demand, the demand curve for a good will
A) shift leftward when the price of the good increases. B) shift rightward when the price of the good increases. C) slope downward. D) slope upward.
The economic life cycle describes how young people usually have higher savings rates than middle-aged people
a. True b. False Indicate whether the statement is true or false