The IS curve becomes steeper when there is
a. a higher marginal propensity to save.
b. a smaller parameter measuring the interest sensitivity of investment.
c. a lower marginal propensity to save.
d. Both a and b
e. Both b and c
D
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If the national incomes of our trading partners increase, then our aggregate demand ________.
A. decreases because consumption decreases B. increases because net exports increase C. decreases because net exports decrease D. increases because consumption increases
Assume that GDP = $10,000 and the MPC = 0.75. If policy makers want to increase GDP by 30 percent, and they want to change taxes and government spending by equal amounts, how much would government spending and taxes each need to increase?
A) $300 B) $750 C) $1,000 D) $3,000
What determines demand and supply in rental markets for capital and land?
What will be an ideal response?
Which of the following factors has been suggested as an explanation for the lack of economic growth in many poor nations?
A. a lack of dependence on the already developed nations B. the supply of human resources is too high. C. inadequate level of resources D. insufficient capital formation