Assume that full-employment national income is Y = $1,200 billion, the current equilibrium national income is Y = $1,600 billion, and the MPC = 0.8 . In order to bring the economy to a full-employment national income,
a. the recessionary gap can be closed by increasing aggregate expenditure by $80 billion
b. the inflationary gap can be closed by cutting aggregate expenditure by $80 billion
c. nothing is needed to bring the economy into full employment equilibrium
d. the recessionary gap can be closed by increasing aggregate expenditure by $400 billion
e. the inflationary gap can be closed by cutting aggregate expenditure by $400 billion
B
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The approximate probability of a value occurring that is greater than one standard deviation from the mean is approximately (assuming a normal distribution)
a. 68.26% b. 2.28% c. 34% d. 15.87% e. none of the above
When the government implements programs such as progressive income tax rates, which of the following is likely to occur?
a. equality is increased and efficiency is increased. b. equality is increased and efficiency is decreased. c. equality is decreased and efficiency is increased. d. equality is decreased and efficiency is decreased.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The marginal rate of transformation in moving from Point A to Point B is
A. -2/3. B. -1.5. C. -3. D. -30.
The government of a DVC may purposely cause inflation because:
A. a rapid rate of inflation attracts private foreign capital into a DVC. B. there is conclusive evidence that inflation discourages people from having large families. C. this will strengthen the nation's position in international markets. D. inflation works like taxation in that it may release resources from consumption so that they can be invested.