A major advantage to owners of convertible stock over preferred stock is that they are the first claimants to the corporation's dividends

Assume that GDP = $10,000 and the MPC = 0.75. If policy makers want to increase GDP by 30 percent, and they want to change taxes and government spending by equal amounts, how much would government spending and taxes each need to increase?

A) $300 B) $750 C) $1,000 D) $3,000

If the economy is growing 5% a year and GDP is $1000 billion, the additional revenues available to meet interest payments on the government deficit would be, ceteris paribus,

A) 50. B) 500. C) It depends upon the amount of new debt issued. D) There would be no additional revenues.