The largest component of GDP is
A) gross private domestic investment.
B) personal consumption expenditures.
C) net exports of goods and services.
D) government expenditure on goods and services.
B
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In the figure above, what would happen to the size of the multiplier if marginal income tax rates were increased?
A) The multiplier would fall in value and might become negative. B) The multiplier would not change in value. C) The multiplier would fall in value but would not become negative. D) The multiplier would rise in value. E) More information is needed to determine the effect on the size of the multiplier.
The price of a bag of pretzels rises from $2 to $3 and the quantity demanded decreases from 100 to 60. What is the price elasticity of demand?
A) 1.0 B) 1.25 C) 40.0 D) 20.0 E) 0.80