The EITC provides substantial work incentive for low-income workers and has only positive supply effects

If the marginal propensity to consume (MPC) is 0.75 and government purchases increase by $200 billion, then

A) equilibrium real Gross Domestic Product (GDP) will increase by $50 billion. B) the effect on equilibrium real Gross Domestic Product (GDP) cannot be determined from the given information. C) equilibrium real Gross Domestic Product (GDP) will increase by $800 billion. D) equilibrium real Gross Domestic Product (GDP) will increase by $200 billion.

If the demand for a good is determined to be "unit elastic," then the elasticity measure

A) is greater than 1.0. B) is equal to 1.0. C) is less than 1.0. D) is infinite.