Multiple Choice
If the marginal propensity to consume is 0.75 and transfer payments increase by $30 billion, real GDP will:
A) increase by exactly $30 billion.
B) decrease by exactly $30 billion.
C) increase by more than $120 billion.
D) increase by less than $120 billion.
Correct Answer:
Verified
Correct Answer:
Verified
Q74: The effect of a government deficit is:<br>A)contractionary.<br>B)expansionary.<br>C)neutral.<br>D)biased.
Q75: Discretionary government spending is an automatic stabilizer.
Q76: The economy is in a recessionary gap.
Q77: If at the beginning of the year
Q78: Automatic stabilizers are government spending and taxation
Q80: In 1999 many European countries signed a
Q81: A cyclically adjusted budget balance:<br>A)shows what the
Q82: Assume the marginal propensity to consume is
Q83: Suppose that economic policy makers want to
Q84: A government budget surplus would be contractionary