If you were told the MPC was = 0.75 and the government engaged in a spending increase of $400B, then the change in GDP would be:
A. $1200B
B. $300B
C. $400B.
D. $1600B.
Answer: D
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In the short run, lowering the federal funds rate shifts the aggregate demand curve ________ so that real GDP ________ and the price level ________
A) leftward; decreases; rises B) rightward; increases; rises C) rightward; decreases; rises D) leftward; decreases; falls E) rightward; increases; falls
The purchase by a foreign government of an airplane produced in the United States is included in U.S
A) government purchases. B) investment expenditures. C) consumption expenditures. D) net exports.
Which of the following is NOT an advantage of inflation targeting?
A) reduction of the time-inconsistency problem B) increased monetary policy transparency C) There is an immediate signal on the achievement of the target. D) consistency with democratic principles
The amount by which the quantity demanded exceeds the quantity supplied at a given price is a
A. Balance-of-payments deficit. B. Market surplus. C. Balance-of-payments surplus. D. Market shortage.