If MPS is equal to 0.15 and MPI is equal to 0.10, an initial change of $19,000 in government expenditure would result in a total change of _____ in income
a. $19,000
b. $16,150
c. $20,000
d. $76,000
e. $126,667
d
You might also like to view...
Spending money on a new car instead of a used car when you are on a fixed budget is an example of
A) a bad thing to do because you run out of money. B) living on the edge. C) the incursion of an opportunity cost. D) isolating variables.
The suggestion that the Fed concentrate only on reducing inflation is an attempt to
A. stabilize the level of unemployment and inflation. B. shift the long-run Phillips curve to the right. C. improve the efficiency of the self-correcting mechanism. D. simplify demand management by focusing on only one goal.
The central bank is said to monetize the deficit when it
a. prints Federal Reserve notes to satisfy the increased demand for money. b. sells government bonds from its own portfolio of government securities. c. requires member banks to buy the bonds to finance the deficit. d. purchases the bonds that the government issues.
The economy is considered to be at its potential output when the only unemployment is structural or frictional.
Answer the following statement true (T) or false (F)