Suppose the MPC is 0.60 . Assume there are no crowding out or investment accelerator effects. If the government increases expenditures by $200 billion, then by how much does aggregate demand shift to the right? If the government decreases taxes by $200 billion, then by how much does aggregate demand shift to the right?
a. $300 billion and $180 billion
b. $300 billion and $300 billion
c. $500 billion and $300 billion
d. $500 billion and $500 billion
c
Economics
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Excess supply in an unregulated market will cause the price of a product to fall
Indicate whether the statement is true or false
Economics
The aggregate supply curve slopes ________ because a ________ in the price level brings a ________ in the real wage rate
A) upward; rise; rise B) downward; fall; rise C) upward; rise; fall D) upward; fall; fall E) downward; rise; rise
Economics