If the marginal propensity to consume (MPC) is 0.75 and if policy makers wish to increase real GDP by $300 million to fight a recession, then by how much would taxes have to change?
A. -$30 million
B. -$50 million
C. -100 million
D. -300 million
Answer: C
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A) Business fixed investment B) Residential investment C) Nominal interest rates D) Unemployment
When the Art Institute of Chicago purchases a painting by Mary Cassatt that she produced in Paris in 1885, this would not be included in the U.S. GDP for 2015.
Answer the following statement true (T) or false (F)
Whenever the benefits of group effort fall on every member of a large dispersed group, regardless of individual contributions, there can be a
A. negative externality. B. free-rider problem. C. spillover effect. D. sudden-damage effect.
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What will be an ideal response?