If the marginal propensity to consume (MPC) is 0.75 and government purchases increase by $200 billion, then
A. equilibrium real Gross Domestic Product (GDP) will increase by $200 billion.
B. equilibrium real Gross Domestic Product (GDP) will increase by $1600 billion.
C. equilibrium real Gross Domestic Product (GDP) will increase by $800 billion.
D. the effect on equilibrium real Gross Domestic Product (GDP) cannot be determined from the given information.
Answer: C
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If the supply curve for housing has the usual positive slope, rent controls are likely to
A. increase the quantity of housing. B. improve the quality of housing. C. aggravate the housing shortage. D. help low-income families find suitable housing. E. increase the demand for housing.
An increase in the MPC will increase the income multiplier and reduce the effect on national income of any change in investment
Indicate whether the statement is true or false
The word "theory" means the same to the scientist as it does to the man on the street
a. True b. False Indicate whether the statement is true or false
If supply is upward-sloping and demand is downward sloping, what happens to the equilibrium real risk-free interest rate and quantity of real loanable funds per time period if there is a decrease in the real saving and a decline in business investment?
a. The real risk-free interest rate falls and the quantity per time period rises. b. The real risk-free interest rate falls and the quantity per time period is uncertain. c. The real risk-free interest rate does not change and the quantity per time period rises. d. The real risk-free interest rate is uncertain and the quantity per time period rises. e. The real risk-free interest rate is uncertain and the quantity per time period falls.