If the marginal propensity to consume is equal to 0.70 and income rises by $20 billion in an economy, then consumption spending will increase by:
a. $6 billion

Which one of the following will cause the production possibilities curve to shift outward?

a. improved public education b. improved health care systems c. larger budgets for research, development, and exploration d. all of the above

If there is initially a federal budget deficit, and government purchases and transfer payments both rise:

a. AD increases and the budget deficit increases. b. AD increases and the budget deficit decreases. c. AD decreases and the budget deficit increases. d. AD decreases and the budget deficit decreases.