In a certain economy, when income is $1000 . consumer spending is $800 . The value of the multiplier for this economy is 2.5 . It follows that, when income is $1020, consumer spending is
a. $816 . For this economy, an initial increase of $100 in consumer spending translates into a $250 increase in aggregate demand.
b. $816 . For this economy, an initial increase of $100 in consumer spending translates into a $400 increase in aggregate demand.
c. $812 . For this economy, an initial increase of $100 in consumer spending translates into a $250 increase in aggregate demand.
d. $812 . For this economy, an initial increase of $100 in consumer spending translates into an $800 increase in aggregate demand.
c
You might also like to view...
Darnell can work on an oil rig, where the probability of being killed in a work-related accident is 4/6,000, or he can earn work as a lumberjack, where the probability of being killed in a work-related accident is 1/6,000
Using the compensating differential approach, the value of Darnell's life is $6 million. How much more per year will working on an oil rig pay than working as a lumberjack? A) $2,000 B) $3,000 C) $4,000 D) $6,000
When the U.S. dollar depreciates against other currencies:
a. foreign goods become less expensive to U.S. buyers. b. U.S. goods become more expensive to foreign buyers. c. foreign currencies depreciate against the U.S. dollar. d. the volume of U.S. imports decline. e. the volume of U.S. exports decline.