Suppose the MPC is 0.9 . If autonomous consumption spending increases by $20 billion, equilibrium output will
a. increase by $22.2 billion
b. increase by $200 billion
c. not change because the MPC only changes consumption when income changes
d. not change because the expenditures multiplier only applies to changes in investment spending and government purchases
e. increase by $18 billion
B
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Why is labor productivity so much lower in developing countries than in developed countries?
a. People concentrate more on theoretical education than on technical experience in developing countries. b. Income per capita is too low in developing countries to support investment in human and physical capital. c. High capital-labor ratio in the developing nations leads to lower productivity. d. Factors of production in developing countries are usually owned by the government.
Monetary policy
a. must be described in terms of interest-rate targets. b. must be described in terms of money-supply targets. c. can be described either in terms of the money supply or in terms of the interest rate. d. cannot be accurately described in terms of the interest rate or in terms of the money supply.
When economists say the quantity demanded of a product has increased, they mean the:
A. demand curve has shifted to the left. B. demand curve has shifted to the right. C. price of the product has fallen, and consequently, consumers are buying more of it. D. price of the product has risen, and consequently, consumers are buying less of it.
For an industry in which average costs continue to decline as output rises, what would you expect the minimum efficient scale to be? Explain your answer
What will be an ideal response?