If the government decides to spend an extra $4 billion on fighter jets that they would otherwise have spent on computers, and the MPC = 0.75, what is the effect on AD?
a. AD increases by $20 billion.
b. AD increases by $16 billion.
c. AD increases by $4 billion.
d. AD does not change.
d
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The structural deficit is the deficit
A) during an expansion. B) that would occur at full employment. C) caused by the business cycle. D) during a recession. E) that does not increase the national debt.
The monetary policy strategy that provides an automatic rule for the conduct of monetary policy is
A) exchange-rate targeting. B) monetary targeting. C) inflation targeting. D) the implicit nominal anchor.
Your purchase in a downtown Cincinnati leather shop of an Italian-made Gucci purse would be classified in the U.S. GDP accounting as
a. an addition to inventory b. an investment good c. a domestic good d. an import e. an export
Pat earns $1,000 per week and spends $850 per week on living expenses, puts $50 in a savings account, and buys $100 worth of shares in a stock mutual fund. Pat's saving is ________, and Pat's saving rate is ________.
A. $50; 5.0 percent B. $150; 15 percent C. $50; 5.9 percent D. $100; 10 percent