To eliminate an AD shortfall of $100 billion when the economy has an MPC of 0.80, the government should increase transfer payments by
A. $80 billion.
B. $100 billion.
C. $20 billion.
D. $25 billion.
Answer: D
You might also like to view...
International trade equalizes the opportunity cost of producing any good around the world
a. True b. False
If Sally Smith creates VCU1 by playing an online game, the effect is to cause the nation's:
a. Monetary base to fall. b. M2 money supply to fall. c. M2 money multiplier to remain the same. d. M2 money supply to rise.
Suppose that some country had an adult population of about 46 million, a labor-force participation rate of 75 percent, and an unemployment rate of 8 percent. How many people were unemployed?
a. 2.54 million b. 2.76 million c. 3.68 million d. 8 million
When using the present value of lost earnings as your measure of the cost associated with a person's lost life, you will find that people
A. who do more socially useful work are valued the most. B. with the most friends are valued the most. C. who work the hardest are valued the most. D. whose earnings are the highest are valued the most.