If the government increases defense spending by $1 billion and the MPC is 0.8, how much additional spending will occur in the third "round" of spending?
a. $640 million
b. $800 million
c. $1 billion
d. $1.8 billion
a
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In what way is monopolistic competition superior to perfect competition?
a. The cost of producing the industry's output is lower in monopolistic competition. b. Consumers benefit from having differentiated products instead of identical products. c. Long-run profits are higher in monopolistic competition than in pure competition. d. In monopolistic competition, firms can fully exploit any existing economies of scale.
What is a dominant strategy equilibrium?
What will be an ideal response?
If, while you are holding a coupon bond, the interest rates on other similar bonds fall, you can be sure that
A) the coupon payments on your bond will fall. B) the market price of your bond will rise. C) the market price of your bond will fall. D) the par value of your bond will rise.
During the last two centuries, after adjustment for inflation,
a. corporate bonds have yielded a real return of approximately 7 percent annually, compared to a real return of about 3 percent for corporate stocks. b. corporate stocks have yielded a real return of approximately 7 percent annually, compared to a real return of about 3 percent for bonds. c. both corporate stocks and bonds have yielded a real rate of return of about 3 percent. d. both corporate stocks and bonds have yielded a real rate of return of about 7 percent.