When the aggregate demand curve shifts to the left against a vertical aggregate supply curve, the price level should __________ unless, as __________ argue, prices may have rigidities

If government imposes an excise tax on a good and the tax burden is borne equally by buyers and sellers, then

A) price elasticity of demand is unitary. B) price elasticity of supply is unitary. C) the absolute values of price elasticities of demand and supply are equal. D) None of the above

Suppose the marginal propensity to consume is 0.75 . If government purchases increase by $100 billion and the extra expenditure is financed with a net tax of $100 billion, by how much will output change?

a. -$400 billion b. $100 billion c. $400 billion d. $0 e. -$100 billion