Suppose that consumers become more pessimistic about the future and, as a result, reduce their consumption by $10 billion. If the marginal propensity to consume is 0.80, how will this $10 billion reduction in consumption affect the equilibrium level of real GDP?

The advice to "retrain" would be most appropriate for which of the following types of unemployment?

a) Cyclical unemployment b) Structural unemployment c) Frictional Unemployment d) Core Unemployment

An efficient way to get a tire manufacturer to produce the socially optimal output level is

A) to impose a tax to make the tire manufacturer bear the external cost it creates. B) for government to set a quota on the quantity of tires that it can produce. C) to grant a subsidy to enable the manufacturer to internalize the external costs of production. D) to assign property rights to the tire manufacturer.