Government purchases rise by $100 billion and the MPC equals 0.75. Assuming that idle resources exist at each expenditure round, and the multiplier is operative, the change in Real GDP equals

If an economy is operating on its production possibilities curve, it is:

A) efficient and fully employed. B) fully employed but not necessarily efficient. C) efficiently producing but not necessarily fully employed. D) inevitably going to grow in the future.

What is the present value of $960 in one year if the current rate of interest is 6 percent?

A) $676.76 B) $905.66 C) $1,017.60 D) $1,449.46