If the government runs a primary deficit in year zero of B0, and, in year 1, decides to stabilize the debt (i.e., prevent the deficit from rising any further), then in year 1 and beyond, it must run a primary surplus equal to

A decrease in autonomous investment of $100 that occurs when the marginal propensity to save (MPS) equals 0.25 will lead to a decrease in real Gross Domestic Product (GDP) of

A) $800. B) $25. C) $400. D) $100.

What does a successful protective tariff do?

(a) It forces foreign manufacturers to pay higher wages. (b) It re-enforces competition. (c) It creates an "economic rent" that goes to the competing domestic industries producing the taxed imported goods. (d) It mandates accelerated technological advance in the domestic economy.