If no fiscal policy changes are implemented to fight inflation, suppose the aggregate demand curve will exceed the current aggregate demand curve by $900 billion at any level of prices. Assuming the marginal propensity to consume is 0.90, this increase in aggregate demand could be prevented by:
A. increasing government spending by $500 billion.
B. increasing government spending by $140 billion.
C. decreasing taxes by $40 billion.
D. increasing taxes by $100 billion.
Answer: D
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The losers when the United States institutes trade restrictions include
a. U.S. consumers of imported goods, U.S. producers who use imported intermediate goods, and, if other countries retaliate, U.S. exporters b. U.S. producers of goods that compete with imported goods only c. U.S. consumers of imported goods and U.S. producers of goods that compete with imported goods d. all U.S. producers of all goods and U.S. exporters e. only U.S. exporters
The European Union Emission Trading Scheme is an example of:
a. a pollution tax. b. a pollution subsidy. c. a command approach. d. cap and trade. e. enforcing private property rights.
Based on the quantity equation, if M = 8,000 . P = 3, and Y = 12,000 . then V =
a. 0.33. b. 2.0. c. 4.5. d. 0.5.
In a market economy, which of the following determines the answer to the WHAT to produce question?
A. Government directives. B. A democratic vote by all consumers. C. Prices and profit. D. Direct negotiations between consumers and government.