Suppose that real GDP is initially $13 trillion and the government attempts to increase real GDP to $14 trillion
The marginal propensity to consume is 0.75, and every $1.00 increase in real government spending crowds out $0.50 in real planned investment expenditures. How much increase in real government spending could lead to the desired level of real GDP?
A) $200 billion
B) $250 billion
C) $500 billion
D) $1 trillion
C)
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The concept of rational expectations first appeared on the economic scene in _______, but it wasn't until the _____________ that it received more significant notice in the economics profession
A) 1931; early 1970s B) 1961; early 1970s C) 1981; early 1990s D) 1991; early 2000s E) 1921; early 1980s
The long-run aggregate supply curve is:
What will be an ideal response?
Productive efficiency means that goods and services are being produced by society in the least costly way.
Answer the following statement true (T) or false (F)
In each of the following scenarios, state whether the labor supply curve would shift to the left, to the right, not shift at all, or if the shift is ambiguous because there is more than one effect and they would move the curve in opposite directions.(a)The stock market rises sharply.(b)Fewer teenagers work while in school than before.(c)A large fraction of the population flees the country because of a bird flu epidemic.(d)The expected future wage declines and the stock market crashes.(e)The current real wage rate rises.
What will be an ideal response?