Consider an economy that is in equilibrium with real GDP = $5,000 . MPS = 1/4 and MPI = 1/5 . What will be the new equilibrium level of income if planned investment spending increases by $500?
a. $15,000
b. $7,000
c. $6,111
d. $5,500
e. $5,000
c
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The exchange rate between currencies of different countries is controlled primarily by supply and demand in currency markets
Indicate whether the statement is true or false
Refer to Figure 13-1. Ceteris paribus, an increase in the price level would be represented by a movement from
A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A.
Which of the following would increase the value of the dollar in the long run?
A) a decrease in U.S. tariffs on foreign goods B) an increase in the demand for American goods relative to goods from other countries C) an increase in inflation in the United States relative to other countries D) an increase in the supply of dollars on the foreign exchange market
Refer to Figure 9.1. If the market is in equilibrium, total producer surplus is
A) $30. B) $70. C) $400. D) $800. E) $1200.