If the MPC is .50 and the equilibrium GDP is $40 billion below the full-employment GDP, then the size of the recessionary expenditure gap is:
A. $40 billion.
B. $20 billion.
C. $60 billion.
D. $80 billion.
B. $20 billion.
You might also like to view...
A net borrower is a country that ________, while a net lender is a country that ________
A) borrows more than it lends; owes more to foreigners than foreigners owe to it B) decreases its stock of outstanding foreign debt; lends more than it borrows C) borrows more than it lends; lends more than it borrows D) lends more than it borrows; borrows more than it lends
Total surplus is in which type of market will be highest?
A. Perfect competition B. Monopoly C. Equally in perfect competition and monopoly D. Natural monopoly
What type of business is most likely to be run as a family business?
a. multinational b. corporation c. partnership d. mutual fund e. sole proprietorship
If the actual price level exceeds the expected price level reflected in long-term contracts,
a. firms will find production more profitable than they had expected and will decrease the quantity of output supplied b. firms will find production less profitable than they had expected and will decrease the quantity of output supplied c. firms will find production less profitable than they had expected and will increase the quantity of output supplied d. unemployment will decrease