If the MPC is 5/6 then the multiplier is
a. 6/5, so a $200 increase in government spending increases aggregate demand by $240.
b. 5, so a $200 increase in government spending increases aggregate supply by $1000.
c. 6, so a $200 increase in government spending increases aggregate demand by $1200.
d. 6/5, so a $200 increase in government spending increases aggregate supply by $1200.
c
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If the total money supply is $3 trillion, real GDP is $8 trillion and the price level is 1.5, then the equation of exchange tells us that velocity equals
A) 16. B) 3. C) 0.25. D) 4.
In the figure above, the shift from the short-run Phillips curve SRPC0 and the long-run Phillips curve LRPC0 to the short-run Phillips curve SRPC2 and the long-run Phillips curve LRPC2 is the result of ________ in the expected inflation rate and
________ in the natural unemployment rate. A) a decrease; a decrease B) an increase; an increase C) no change; a decrease D) an increase; no change E) a decrease; an increase
Suppose you are the owner of a softball team and you are hiring laborers (players). Suppose also that not all players are equally talented, but that union rules require that they all receive the same salary. If you measure output by the number of runs scored in a season, your total variable cost curve will take what shape, and why?
a. U-shaped because softball teams like this one are no different from other businesses b. U-shaped because even though salaries are identical, some players are better and will score more runs c. increasing but at different rates because there are only so many times players can come to bat d. increasing but at different rates because even though salaries are identical, some players are better and will score more runs e. increasing at a constant rate because union rules require uniform salaries for players
You are a manager in a perfectly competitive market. The price in your market is $14. Your total cost curve is C(Q) = 10 + 4Q + 0.5Q2. What level of profits will you make in the short run?
A. $40 B. $80 C. $20 D. $60