Assume that the multiplier effect for Mexico is 0.85 for an increase in spending by the U.S. government by $1 . Therefore, a $20 billion decrease in spending by the U.S. government results in:
a. a $23.5 billion increase in Mexican real GDP.
b. a $133.3 billion decrease in Mexican real GDP.
c. a $3 billion decrease in Mexican real GDP.
d. a $17 billion decrease in Mexican real GDP.
e. a $23.5 billion decrease in Mexican real GDP.
d
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Human capital is defined as
a. the skills and knowledge possessed by workers b. the tools used by labor c. equipment and machinery used to train workers d. buildings purchased by households rather than by businesses e. equipment and machinery used to aid household production and increase available leisure time
The opportunity cost of slowing global warming by reducing carbon dioxide emissions is
a. extremely high because policies that would significantly reduce emissions will adversely affect economic growth. b. insignificant compared to the probable impact of warming from those emissions. c. irrelevant because each aspect of the environment is important enough to justify full protection from environmental change, at whatever cost is necessary. d. zero because fuel cost savings alone will offset all opportunity costs.