Refer to Figure 23-3. Suppose that government spending increases, shifting up the aggregate expenditure line. GDP increases from GDP1 to GDP2, and this amount is $400 billion. If the MPC is 0
75, then what is the distance between N and L or by how much did government spending change?
A) $10 billion B) $100 billion C) $200 billion D) $300 billion
B
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Data on output and aggregate expenditure in Macroland are given in the table below.Real GDP (Y)Aggregate Expenditure (AE)2,0002,3003,0003,2004,0004,1005,0005,0006,0005,900Based on these data, the equilibrium level of output is
A. $32,000. B. $4,100. C. $20,000. D. $5,000.
Which of the following statements concerning tariffs is NOT true?
A) A tariff results in a deadweight loss. B) A tariff creates revenue for the government. C) A tariff decreases international trade. D) A tariff leaves the price of imports unchanged.
A $130,000 investment in new equipment this year will increase your firm's profits by $50,000 in each of the next 3 years. What is the net present value of this investment if your firm's opportunity cost of capital is 10 percent?
A) -5,657 B) 5,657 C) 124,343 D) 128,850
If the idea of herd instinct is true, it suggests that the:
A. efficient-market hypothesis doesn't always hold. B. efficient-market hypothesis does, in fact, hold. C. inefficient-market hypothesis doesn't always hold. D. inefficient-market hypothesis does, in fact, hold.