Assume that taxes depend on income. The MPC is 0.8 and t is 0.2. The government spending multiplier is
A. 1.25.
B. 2.78.
C. 4.
D. 4.17.
Answer: B
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Which of the following should not be considered as an opportunity cost of attending college?
a. Expenses that are the same whether or not you attend college b. Lost salary c. Business lunches d. Interest that could have been earned on your money had you put the money into a savings account, rather than spent it on tuition e. Opportunities sacrificed in the decision to attend college
If a society is operating on its production possibilities frontier, and then decides to produce less health care,
a. its standard of living will fall b. its standard of living will improve c. some of its resources will become unemployed d. it will be able to produce more of some other good or service e. the opportunity cost of producing health care will rise
When evaluating a business decision, an economist will often resort to the use of present value because
A. the profits may not be large enough to warrant the time and attention of the investor. B. the investment is often under one set of managers and the profits under another. C. the investment is often in one currency and the profits in another. D. the investment occurs in one time period and the profits in another.
In 2010, the top 1% of households in the U.S. owned about how many percent of total wealth in the nation?
A. 20% B. 10% C. 35% D. 50%