A $5 billion cut in government purchases caused real GDP in the economy to decrease by $12.5 billion. The MPC for this economy is
A. 0.6.
B. 0.9.
C. 0.8.
D. 0.75.
Answer: A
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Both France and the United Kingdom successfully used exchange-rate targeting to lower inflation in the late 1980s and early 1990s by tying the value of their currencies to the
A) U.S. dollar. B) German mark. C) Swiss franc. D) Euro.
Used cars sell for much less than new cars because
A) of imperfect competition in the automobile industry. B) buyers know much more about the quality of used cars than sellers do. C) sellers know much more about the quality of used cars than buyers do. D) physical depreciation of used cars is very high. E) of licensing arrangements by the government.
A resource is something that
a. is used to produce goods and services b. is provided by nature, not made by society c. exists in unlimited quantities d. must be produced by a firm e. consumes goods and services
Assume the following cost information about Fred's widget company: Its fixed cost is $27, and its total variable cost is $18 for 1 unit; $33 for 2; $45 for 3; $60 for 4; and $78 for 5 . Given this information: a. average fixed cost rises from an output of four to an output of five
b. average fixed cost is greater than marginal cost for the second unit produced. c. the output level which minimizes average total cost is four units. d. average variable cost rises, but average total cost falls, as output increases from four to five.