Assume the marginal propensity to consume is 0.96 . Firms become pessimistic and decrease investment spending by $100 billion. Other things equal, real GDP will:
a. decrease by $100 billion.
b. not change.
c. decrease by $96 billion.
d. decrease by $2,500 billion.
d
Economics
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Suppose you have borrowed money from a bank to buy a house. Which of the following will happen if the inflation rate unexpectedly rises?
A) You will be worse off. B) The real cost of your mortgage will rise. C) The bank's shareholders will be better off. D) You will be better off.
Economics
An effective minimum wage tends to
A) increase the supply of unskilled labor. B) decrease the demand for unskilled labor. C) create a surplus of unskilled labor. D) accomplish all of the above. E) accomplish none of the above.
Economics