If the MPC is 0.5 and the tax rate is 10%, a $500 increase in autonomous government purchases will increase equilibrium income by
A) $225.
B) $280.
C) $910.
D) $1,110.
C
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The figure above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $6 per hour, how many hours do students work?
A) 12,000 hours B) 9,000 hours C) 6,000 hours D) None of the above answers is correct.
Which of the following is an example of a market solution to a queuing problem?
a. selling discounted televisions to the first shoppers to grab them b. paying premium prices for reserved seats to avoid lines at a sporting event c. selling concert tickets to the first 500 people in line d. paying a lower price to buy general admission tickets instead of first-class seats
A lump-sum tax, such as a $1000 tax that every family must pay one time, is
A. an autonomous tax. B. negatively related to real GDP. C. a regressive tax. D. a type of income tax.
If the marginal propensity to save is 0.2 in an economy, a $20 billion rise in investment spending will increase:
A. GDP by $120 billion. B. GDP by $20 billion. C. saving by $25 billion. D. consumption by $80 billion.