If the MPC is 0.6, then a 50-unit rise in taxes and a 50-unit rise in government spending will shift the IS curve
a. to the right by 50 units.
b. to the right by 75 units.
c. to the left by 125 units.
d. to the left by 75 units.
A
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Consumers don't care which supplier they buy from in a perfectly competitive market because:
A) the outputs of the firms in a perfectly competitive market are all the same. B) the consumers have no choice regarding who they buy from. C) price is always low enough that the choice of supplier doesn't matter. D) all of the above.
An expansionary gap in the short-run results in: a. lower resource prices in the long run. b. unemployment in the long run
c. a recessionary gap in the long run. d. cost-push inflation in the long run. e. demand-pull inflation in the long run.
Which of the following is most likely to result in inflation?
a. Aggregate demand and aggregate supply grow at the same rate. b. Neither aggregate demand nor aggregate supply grows at all. c. Aggregate supply grows more rapidly than aggregate demand. d. Aggregate demand grows more rapidly than aggregate supply.
If the central bank of a country increases the interest rate, it will: a. weaken the exchange rate
b. decrease the demand for investment spending. c. increase the price level. d. increase the net exports of that country.