Solved

If Short-Run Equilibrium Output Equals 10,000, the Income-Expenditure Multiplier Equals

Question 64

Multiple Choice

If short-run equilibrium output equals 10,000, the income-expenditure multiplier equals 10, the mpc equals 0.9, and potential output (Y*) equals 9,000, then transfers must be decreased by approximately ________ to eliminate any output gap.


A) 90
B) 100
C) 111
D) 1,000

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q59: For an economy starting at potential output,

Q60: In the Keynesian model, it is assumed

Q61: Refer to the accompanying figure. <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB6547/.jpg"

Q62: Two drawbacks in using fiscal policy as

Q63: For an economy starting at potential output,

Q65: If short-run equilibrium output equals 10,000, the

Q66: If short-run equilibrium output equals 10,000, the

Q67: In the short run with predetermined prices,

Q68: Menu costs are the costs of:<br>A)running a

Q69: In the Keynesian model, consumption depends on:<br>A)whether