If the marginal propensity to consume (MPC) is 0.90, a $100 increase in investment spending, other things being equal, will cause an increase in equilibrium real GDP of:
a. $90.
b. $100.
c. $900.
d. $1,000.
d
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Consider a PPF with consumption goods on the horizontal axis and capital goods on the vertical axis. If the country operates on its PPF near its ________ axis, this country ________
A) vertical; will experience greater economic growth B) vertical; will not face opportunity costs C) horizontal; will have a larger chance at economic growth D) horizontal; faces larger trade offs E) vertical; is operating at an inefficient point
A state with "right-to-work" laws would most likely have
A) higher employment levels than neighboring states without such laws. B) more workers' benefits than neighboring states without such laws. C) more union workers than neighboring states without such laws. D) more worker safety requirements than neighboring states without such laws.
In competitive markets, a surplus or shortage will:
A. Never exist because the markets are always at equilibrium B. Cause changes in the quantities demanded and supplied that tend to eliminate the surplus or shortage C. Cause shifts in the demand and supply curves that tend to eliminate the surplus or shortage D. Cause changes in the quantities demanded and supplied that tend to intensify the surplus or shortage
An example of automatic stabilizers is
A. government spending falling during an expansion. B. government spending falling during a recession. C. deficit targeting. D. taxes falling in an expansion.