Multiple Choice
Which of the following statements is incorrect?
A) Given the economy's MPS, a $15 billion reduction in government spending will reduce the equilibrium GDP by more than would a $15 billion increase in taxes.
B) Other things unchanged, a tax reduction of $10 billion will increase the equilibrium GDP by $25 billion when the MPS is 0.4.
C) If the MPC is 0.8 and GDP has declined by $40 billion, this was caused by a decline in aggregate expenditures of $8 billion.
D) A government surplus is anti-inflationary; a government deficit is expansionary.
Correct Answer:
Verified
Correct Answer:
Verified
Q116: In a private closed economy, when aggregate
Q117: C = 40 + 0.8Y Ig =
Q118: In a private closed economy, when aggregate
Q119: <span class="ql-formula" data-value="\begin{array}{l}\begin{array} { | c |
Q120: At the $180 billion equilibrium level of
Q121: If unintended increases in business inventories occur,
Q122: Other things equal, an increase in an
Q124: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB8601/.jpg" alt=" Refer to the
Q125: In the aggregate expenditures model, it is
Q126: <span class="ql-formula" data-value="\begin{array}{l}\begin{array} { | c |