Given the consumption function C = $500 billion + 0.80Y, an increase in disposable income from $6,000 billion to $7,000 billion will cause consumption to increase by:

According to the economy's self-correcting mechanism, how does the economy return to potential output following a negative demand shock? How is the recovery process different, if the government implements a policy of economic stimulus?

What will be an ideal response?

Many health economists believe that health-care reform will:

a. decrease demand for new, better, and more expensive medical advances. b. lower premiums for young adults c. eliminate private health insurance entirely. d. have a very limited effect on reducing government health-care expenditures.