Suppose the marginal propensity to consume is 0.75. A $150 billion increase in government spending shifts the IS curve
A) to the right by $50 billion.
B) to the left by $50 billion.
C) to the left by $600 billion.
D) to the right by $600 billion.
D
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All of the following have been proposed as explaining the limited effectiveness of monetary policy during and after the Financial Crisis of 2007-2009 EXCEPT:
A) recessions accompanied by financial crises tend to be severe B) a high level of uncertainty due in part to government policy C) the reluctance of the Fed to implement nonconventional policies D) structural changes as important sectors of the economy were deeply affected by the financial crisis
If a country increased the production of its capital goods, then
A) the more consumption of goods we can have today. B) the less consumption we can have today, but we will have more in the future. C) the more unemployed resources there will be in the future. D) the more unemployed resources there are today.