If the government decreased income taxes by $500 billion and does not pursue a policy change, which of the following would require the private sector to adjust in order to finance the tax decrease?
A) Increase other taxes by $500 billion.
B) Reduce transfer payments by $500 billion.
C) Reduce expenditures on programs such as education or defense by $500 billion.
D) Issue $500 billion in new Treasury Bonds.
D
Economics
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Suppose the market-clearing price of wheat is $2.50 per bushel. At a price above $2.50,
A) supply would equal demand. B) quantity supplied would equal quantity demanded. C) quantity supplied would exceed quantity demanded. D) quantity supplied would be less than quantity demanded.
Economics
If equilibrium income is $500 billion, MPC = 0.8, MPI = 0.2 and autonomous government spending increases by $20 billion, the new equilibrium income will be _____
a. $600 billion b. $550 billion c. $525 billion d. $520 billion e. $500 billion
Economics