The government decides to increase its expenditures by $250. The multiplier in this economy is 4 and the tax rate is 22 percent. The net effect of this expansionary fiscal policy is to:

A. increase the budget deficit by $220.
B. decrease the budget deficit by $220.
C. decrease the budget deficit by $30.
D. increase the budget deficit by $30.


Answer: D

Economics

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Which of the following will tend to result in the least variation in the expected real rate of return from the ownership of stocks?

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Economics

The market for Product A has many sellers, selling identical products, each earning an economic profit of zero in the long run. The market for Product B has many sellers, selling differentiated products, each earning an economic profit of zero in the long run. Given this information, one can conclude that 

A. The markets for Product A and Product B are perfectly competitive. B. The markets for Product A and Product B are monopolistically competitive. C. The market for Product A is monopolistically competitive and the market for Product B is perfectly competitive. D. The market for Product A is perfectly competitive and the market for Product B is monopolistically competitive.

Economics

Examples of external shocks are all of the following EXCEPT

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Economics