Within the simple Keynesian model with lump-sum taxes, if the MPC (b) were 0.75 then if taxes rise by $200 then income
a. rises by $800.
b. falls by $200.
c. falls by $800.
d. rises by $200.
e. falls by $800.
E
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All of the following statements are examples of normative economic analysis except
A) as the demand for emergency room nurses increases, more students are choosing to enroll in nursing school. B) to provide better care, doctors should be required to limit the number of patients they see each day. C) people should be able to choose whether they want to purchase health insurance. D) prescription drugs are too expensive and the government needs to regulate prices in the pharmaceutical industry.
Goods differ on the basis of whether their consumption is rival and excludable. Explain the terms "rival," nonrival," "excludable," and "nonexcludable" as they are used to define goods
List the four categories of goods and define these categories in terms of rivalry and excludability.
Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and GDP Price Index in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period falls, and GDP Price Index rises. b. The quantity of real loanable funds per time period falls, and GDP Price Index falls. c. The quantity of real loanable funds per time period rises, and GDP Price Index falls. d. The quantity of real loanable funds per time period falls, and GDP Price Index remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Inflation caused by continually decreasing short-run aggregate supply is
A. cost-push inflation. B. demand-pull inflation. C. demand-push inflation. D. cost-pull inflation.