According to the "wealth effect," when the ________ falls, the ________ rises
A) price level; the real value of household wealth
B) price level; the nominal value of household wealth
C) inflation rate; nominal value of household assets
D) unemployment rate; average level of household income
A
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Gross national product, GNP, of the United States is the market value of all final goods and services
A) consumed by citizens of the United States anywhere in the world. B) consumed within the United States. C) produced within the United States. D) produced by citizens of the United States anywhere in the world.
If the marginal propensity to consume (MPC) is 0.75 and if policy makers wish to increase real GDP by $300 million to fight a recession, then by how much would taxes have to change?
a. -$30 million b. -$50 million c. -100 million d. -300 million