An increase in government expenditures by $100 (unmatched by an increase in taxes) would, if the MPC = 0.90, result in an increase in real GDP by:

a. $1,000.
b. $9,000.
c. $900.
d. $190.
e. inadequate information is given.


a

Economics

You might also like to view...

The accountant for Muzhi's Sushi claims that Muzhi has accomplished "technological efficiency." This means that Muzhi's Sushi

A) produces a given output using the least inputs. B) produces a given output at the lowest cost. C) has an economic profit greater than a normal profit. D) has a normal profit greater than an economic profit.

Economics

A beneficial supply shock would cause

A) a movement up the short-run Phillips curve. B) a movement down the short-run Phillips curve. C) the short-run Phillips curve to shift upward and to the right. D) the short-run Phillips curve to shift downward and to the left.

Economics

The Equivalent Variation for an increase in the price of a good is

A) the reduction in a consumer's income necessary to harm the consumer by as much as the price increase. B) the increase in a consumer's income necessary to eliminate the consumer's harm from a price increase. C) the change in consumer surplus resulting from a price increase. D) the amount of money a consumer would accept to be subject to a price increase.

Economics

The theory of public choice

A) is the theory of how government decides on what military hardware to purchase. B) considers government decision-making efficient. C) is the study of collective decision making. D) is the study of how negative externalities can be reduced.

Economics