In a country without foreign trade and income taxes, if the government decreases autonomous spending and autonomous taxes by 50 then total expenditures and output will
A) increase by 50 if the MPC is 1.
B) decrease by 50 for any value of the MPS greater than zero.
C) decrease by 100 if the MPS is 0.5.
D) increase by 200 if the MPS is 0.25.
B
Economics
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A discount shoe manufacturer's advertisement suggests that they are almost as good as the name brands but better value. The shoe manufacturer believes that the advertisement will make
a. The demand for its product less elastic b. His customers less price sensitive c. Him able to raise prices d. None of the above
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In the last 15 years, the U.S. Lorenz curve has
a. become a straight line b. become a decreasing curve c. moved closer to the diagonal d. moved further from the diagonal e. not shifted but there has been an upward movement along the curve
Economics