In the Keynesian-cross model, if the MPC equals 0.75, then a $1 billion decrease in taxes increases planned expenditures by ______ and increases the equilibrium level of income by ______.
Fill in the blank(s) with the appropriate word(s).
$.75 billion; more than $.75 billion
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When the Fed purchases government securities ________ loans end up being made because ________
A) more; excess reserves in the banking system increase B) fewer; excess reserves in the banking system decrease C) more; excess reserves in the banking system decrease D) fewer; required reserves in the banking system increase but desired reserves decrease E) fewer; excess reserves in the banking system increase
While studying with your friend, your friend states, "Our leisure time increases GDP but lowers our economic welfare because it reduces the amount of goods and services we can consume." Is your friend's statement CORRECT?
What will be an ideal response?
Marginal analysis involves undertaking an activity
A) only if its marginal costs are greater than its marginal benefits. B) until its marginal costs start declining. C) until its marginal benefits equal marginal costs. D) only when its marginal benefits are positive.
With consumption on the vertical axis and leisure on the horizontal axis, the slope of the budget line is equal to
A) w. B) -w. C) ?. D) -?.