If the MPC is 0.6, and the government spends an additional $50b, the overall effect on GDP will be:
A. an increase of $250b.
B. a decrease of $25b.
C. a decrease of $75b.
D. an increase of $125b.
D. an increase of $125b.
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Economists report changes in unemployment in:
A. percentage points, not percentages. B. percentages, not percentage points. C. percentage points or percentages, interchangeably. D. nominal figures; they rarely use percentages or percentage point changes.
Tim earns income of $60,000 per year and pays $21,000 per year in taxes. Tim paid 20 percent in taxes on the first $30,000 he earned. What was the marginal tax rate on the second $30,000 he earned?
a. 20 percent b. 30 percent c. 50 percent d. 70 percent
Frictional unemployment is a sign of a healthy economy because
A. workers become more productive after taking vacations. B. economic growth remains steady. C. workers seek labor where they can provide the most value to their respective employer. D. wages fall, which forces workers to compete.
If the Gross Domestic Product (GDP) in the United States increases, which of the following will probably result?
a. Employment levels will increase. b. Employment levels will remain flat. c. Unemployment rates will increase. d. Wages will increase.