Mr. Adams owns a textile business. In order to deal with the principal-agent problem, Mr. Adams might offer his employees

Requiring Medicare participants to pay a small fraction of the cost of their medical care

a. reduces the quantity of health care they demand to zero b. has no effect on the amount of health care they consume, but does generate revenue for the government c. reduces their utilization of health care without compromising their health d. actually increases the amount of consumer surplus they receive e. amounts to a significant burden for most of those participants

Assume the MPC is 2/3. If investment spending increases by $2 billion, the level of GDP will increase by:

A. $3 billion. B. $2/3 billion. C. $6 billion. D. $2 billion.