Assume a closed economy with fixed taxes and the marginal propensity to consume is equal to 0.9. What is the government spending multiplier?

Refer to the above diagram. The budget line shift which moves the consumer's equilibrium position from point A to point B suggests:

A) an increase in the quantity of Y demanded. B) a decrease in the quantity of Y demanded. C) a leftward shift in the demand curve for Y . D) a rightward shift in the demand curve for Y .

All of the payment to a factor of production will be economic rent when the factor of production has:

A) an infinitely inelastic supply curve. B) an infinitely elastic supply curve. C) a constant, unit elastic supply curve. D) an infinitely inelastic demand curve.