To eliminate an AD shortfall of $100 billion when the economy has an MPC of 0.50, the government should increase spending by
A. $50 billion.
B. $500 billion.
C. $100 billion.
D. $200 billion.
Answer: A
You might also like to view...
What is the correct equation if the oligopolists restrict joint output to Q* and set their price at P*?
a. MC > MR at Q*
b. MR = MC at Q*
c. MC = P* at Q*
d. MC = P* at Q*
In the figure above, what is the interval elasticity of demand over the price range $60 to $80?
A. -0.75 B. -2.00 C. -1.40 D. -1.00 E. -1.10
An economy has two workers, Paula and Ricardo. Every day they work, Paula can produce 4 computers or 16 shirts, and Ricardo can produce 6 computers or 12 shirts. What is the opportunity cost for Paula to produce one computer?
A. 1 shirt B. ¼ shirt C. ½ shirt D. 4 shirts
Big Pools is large swimming complex. Suppose senior citizens have a demand for entrance into Big Pools that is less than half of the adults demand for entrance and there are an equal number of senior citizens and adults. If Big Pools practices two-part pricing, to earn greater profit, Big Pools ________ adjust the membership fee to include ________.
A) should not; adults B) should; all consumers C) should; senior citizens D) should not; senior citizens