If MPC = 0.8, how much government spending would be needed to close a recessionary gap of $500?
a. –100
b. +80
c. –80
d. +500
e. +100
E
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If both prices decreases by 50%,
A) budget constraint will be unchanged. B) slope of the budget constraint will increase. C) slope of the budget constraint will decrease. D) budget constraint will shift outward in a parallel fashion.
The longer the time period considered, the elasticity of supply tends to: a. decrease
b. remain constant. c. increase. d. converge to zero.
The monopolistically competitive firm earns zero economic profit in the long run.
Answer the following statement true (T) or false (F)
An example of a government-imposed barrier to entry gives a firm the exclusive right to a new product for a period of 20 years from the date the product is invented. This entry barrier is known as
A) a copyright. B) an exclusive marketing agreement. C) a patent. D) a tariff.