If the MPC is 0.75, and the government cuts spending by $100b, the overall effect on GDP will be:
A. an increase of $400b.
B. a decrease of $250b.
C. a decrease of $400b.
D. an increase of $250b.
Answer: C
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Which of the following is true?
A) MSC = MC + Marginal external cost B) MC = Marginal external cost - MSC C) MC = Marginal external benefit + MSC D) MSC = Marginal external cost + marginal external benefit E) MSC = Marginal external cost - marginal external benefit
Typical estimates of the sacrifice ratio suggest that about 10 percent of annual output has to be given up in order to reduce the inflation rate from
a. 8 percent to 4 percent. b. 8 percent to 5 percent. c. 7 percent to 5 percent. d. 7 percent to 6 percent.
Which of the following is not associated with the monopoly market structure?
A. many sellers B. a single seller C. a unique product D. impossible entry into the market
OPEC is an example of a:
A. monopsony. B. monopoly. C. duopoly. D. cartel.