If the government increases defense spending by $1 billion and the MPC is 0.8, how much additional spending will occur in the third “round” of spending?
A. $640 million
B. $800 million
C. $1 billion
D. $1.8 billion
Answer: A
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Classical growth theory argues that when real GDP per person rises above the subsistence level
A) technological change slows down, stagnating the economy. B) population growth increases, driving real GDP per person back to subsistence level. C) people don't want to work as much, decreasing labor supply. D) the economy enjoys a period of permanent growth.
The Industrial Revolution refers to the widespread use of power-driven machinery and the economic and social changes that resulted in the first half of the years of the 1800s.
Select whether the statement is true or false. A. True B. False
When the economy is in the Keynesian range, an increase in aggregate demand will increase _____ without increasing _____.
Fill in the blank(s) with the appropriate word(s).
Which of the following is a TRUE statement?
A) All goods are economic goods. B) All economic goods are goods, but not all goods are economic goods. C) Economic goods and goods mean the same thing. D) Economic goods do not include services while goods do include services.