If government spending is increased by $1,000 and taxes are increased by $1,000, the equilibrium level of income will
A. increase by $1,000.
B. not change.
C. increase by $2,000.
D. decrease by $1,000.
Answer: A
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Suppose a bank has demand deposits of $2,500, excess reserves of $125, and a reserve requirement of 25 percent. What is the loss in the money expansion process of the whole banking system if the bank decides to lend out only $100?
a. $100 b. $150 c. $200 d. $400 e. $500
Marginal physical product measures the increase in total output that results from a one-unit increase in an input.
Answer the following statement true (T) or false (F)
Transfer payments are included in the government budget deficit but not included in the government purchases component of GDP
a. True b. False Indicate whether the statement is true or false
Assume that the marginal tax rate is 10 percent for the first $10,000 of income, 20 percent for income between $10,000 and $40,000, and 30 percent for any income over $40,000. If Jerome has taxable income equal to $60,000 for the year, what is his tax bill?
A. $6,000. B. $13,000. C. $18,000. D. $15,000.