If a fall in investment demand of 100 units causes equilibrium income to fall by 150 units in the simple Keynesian model, then the marginal propensity to save must be
a. .25.
b. 1.5.
c. .5.
d. 1/3.
e. 2/3.
D
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Frictional unemployment refers to unemployment that is a result of: a. a mismatch of skills
b. being out of work 27 weeks or longer. c. job search. d. seasonal decreases in demand for labor. e. a recession in the economy.
Explain how a value-added tax (VAT) works and how it differs from a sales tax. What impact does a VAT have on government revenue and the price of products paid by consumers?
An expansionary fiscal policy increases a government budget deficit or reduces a government budget surplus, increases borrowing by the Treasury, which will sell more bonds.
a. true b. false
Because of the problem of scarcity, the choice to produce:
A. more of one good requires producing less of another good. B. some of any good requires producing none of any other good. C. more of every good is feasible. D. less of one good requires producing more of every other good.