If the price of inputs rises and foreign income rises:
a. Price index rises, and real GDP falls.
b. Price index rises, and the change in real GDP is uncertain.
c. Price index falls, and real GDP rises.
d. Price index falls, and real GDP falls.
e. Price index falls, and the change in real GDP is uncertain.
.B
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If the absolute value of the tax multiplier equals 1.6, real GDP is $13 trillion, and potential real GDP is $13.4 trillion, then taxes would need to be cut by ________ to restore the economy to potential real GDP
A) $250 billion B) $400 billion C) $640 billion D) None of the above are correct. Taxes should be increased in this case.
Which of the following is in charge of U.S. aid to foreign countries?
A. Agency for International Development (AID) B. World Bank C. International Monetary Fund (IMF) D. New International Economic Order (NIEO)