Suppose a $30 billion increase in government purchases increased GDP by $120 billion, what is the value of the MPC?
a. 4.00
b. 0.75
c. 0.25
d. 0.50
e. 0.33
B
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In the short run, when a firm is about to begin production it pays only:
A) variable costs. B) opportunity costs. C) sunk costs. D) fixed costs.
Which central bank gained the power to set interest rates independent of the government in the late 1990s?
A) Bank of England B) Bank of Canada C) Bank of China D) Federal Reserve Board
In the Ricardian model, the marginal product of labor:
a. first rises, then falls, as more labor is employed to produce a good. b. first falls, then rises, as more labor is employed to produce a good. c. continuously falls, as more labor is employed to produce a good. d. does not change, as more labor is employed to produce a good.
Consider a perfectly competitive market. What do you expect to happen to the number of firms and firm profitability in the short run and long run if demand for the product falls?
What will be an ideal response?