To answer the next question use the information in the table below which illustrates the multiplier process resulting from an autonomous increase in investment by $5. Change in IncomeChange in ConsumptionChange in SavingsAssumed increase in investment$5.00 $1.25Second round $2.81 All other rounds 8.44 Totals 5.00The total change in income resulting from the initial change in investment will be
A. $15.
B. $5.
C. $10.
D. $20.
Answer: D
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When aggregate planned expenditure exceeds real GDP,
A) an unplanned increase in inventories occurs. B) real GDP remains at its equilibrium level. C) firms decrease production. D) an unplanned decrease in inventories occurs. E) real GDP decreases.
The marginal productivity theory of income distribution was developed by
A) William Stanley Jevons. B) George Akerlof. C) John Bates Clark. D) Edward Lazear.
One of the most serious weaknesses in the Medicare system is that
a. patients are not able to choose their own physicians. b. the definition of an episode of illness is too restrictive. c. it provides poor insurance coverage for unusually long hospital stays. d. patients must pay a deductible every time they enter the hospital. e. Part B is voluntary.
Discounting is the process of
a. cutting prices to get rid of surplus stocks. b. finding the present value of future dollars. c. finding the future value of present dollars. d. giving special concessions to special customers.