Use the aggregate expenditures model and assume the marginal propensity to consume (MPC) is 0.90 . An increase in government spending of $1 billion would result in an increase in GDP of:
a. $0.
b. $0.9 billion.
c. $1.0 billion.
d. $9.0 billion.
e. $10.0 billion.
e
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In the above table, what is the marginal revenue product of the 4th worker?
A) $92 B) $70 C) $40 D) $8
The American Association of Retired Persons (AARP) provides checklists summarizing the voting and attendance records of legislators. Which of the following is true?
a. If the AARP's members were rational, it wouldn't have to do this. b. This policy is useless if AARP members are rationally ignorant. c. This policy is intended to reduce voters' rational ignorance by decreasing the cost of information. d. If AARP members read this information, their rational ignorance would be eliminated. e. If all voters in the nation read this information, their rational ignorance would be eliminated.
The "net export effect"
What will be an ideal response?
Arthur sells $100 worth of cotton to Bob. Bob turns the cotton into cloth, which he sells to Camille for $300. Camille uses the cloth to make prom dresses that she sells to Donita for $700. Donita sells the dresses for $1,200 to kids attending the prom
The total contribution to GDP of this series of transactions is: A. $1,200. B. $500. C. $2,300. D. $1,100.