Suppose that when disposable income increases by $1,000, consumption spending increases by $750. Given this information, we know that the marginal propensity to consume (MPC) is

For the federal deficit to be lowered,

A) the federal government must decrease its spending and increase net exports. B) the federal government's expenditures must be lower than its tax revenue. C) the Federal Reserve must reduce the money supply. D) the Federal Reserve must raise interest rates and lower the required reserve ratio.

In 2002 the steel industry successfully lobbied Congress to impose a tariff of 8 to 30 percent on foreign steel. Which of the following is an unintended consequence of this tariff?

(a) U.S. steel firms were protected from the price cutting efforts of foreign competitors benefiting from governmental support in their countries. (b) U.S. steel firms could charge higher steel prices in order to boost profits. (c) Many steel-using firms in the U.S. went out of business and about 200,000 workers lost their jobs to higher steel prices. (d) American steel workers kept their jobs.