Multiple Choice
During a recession, analysts at the CBO project that the economy is operating $1.5 trillion below potential output. Assuming the MPC is 0.8, by how much would the government have to cut taxes to restore potential output?
A) $375 billion
B) $300 billion
C) $1.2 trillion
D) $800 billion
Correct Answer:
Verified
Correct Answer:
Verified
Q82: The figure shown displays various economic outcomes.
Q83: A negative relationship exists between the price
Q84: An increase in production costs will shift
Q85: Falling output in the short run could
Q86: When the economy is operating at a
Q88: In macroeconomics, the long run refers to:<br>A)
Q89: Lower interest rates cause:<br>A) firms to invest
Q90: Because the prices of final goods and
Q91: When prices rise, the interest rate:<br>A) also
Q92: A(n) _ relationship exists between the price