Suppose that real GDP is initially $14 trillion and the government attempts to increase real GDP to $15 trillion. The marginal propensity to consume is 0.8, and every $1.00 increase in real government spending crowds out $0
50 in real planned investment expenditures. Which increase in government spending below could yield the desired level of real GDP?
A) $200 billion B) $125 billion C) $100 billion D) $400 billion
D
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According to the Coase theorem, under certain conditions the market can internalize externalities.
Answer the following statement true (T) or false (F)
If long-run economic growth is not accompanied by a change in aggregate demand, the result will be
A) persistent inflation. B) secular deflation. C) devaluation of the dollar. D) appreciation of the dollar.
In the United States, individuals are forced to make choices
a. because time is scarce, though spending power is not b. because spending power is scarce, though time is not c. though neither time nor spending power are scarce d. because both time and spending power are scarce e. because living standards are low
The ________ is the European Union's ultimate decision-making body and is composed of the different ministers of the member countries.
A) European Commission B) Council of the European Union C) European Parliament D) European Court of Justice