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With proportional income tax,

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With proportional income tax;a. The tax multiplier equals (MPC)(1-MPC);b. The tax multiplier equals ?MPC/(1-MPC);c. The spending multiplier equals (MPC)/(1-MPC);d. The spending multiplier equals 1/[1-MPC(1-t)];e. The spending multiplier equals 1/[1-(MPC)t];Suppose the economy had been operating along a given short-run Philips curve for several years and then experienced a year of stagflation. The year of stagflation would;a. Be represented as a move upward along the short-run Philips curve;b. Be represented as a move downward along the short-run Philips curve;c. Can be represented as a point above the short-run Philips curve;d. Be represented as a point below the short-run Philips curve;e. Correspond to the origin;If the multiplier is 4, a $10 billion increase in autonomous investment will cause a;a. $10 billion increase in equilibrium investment;b. $40 billion increase in equilibrium investment;c. $40 billion increase in equilibrium real GDP demanded;d. $400 billion increase in equilibrium real GDP demanded;e. $40 billion increase in consumption spending;If the price level increases, other things constant, consumption spending;a. Increases because real income rises;b. Decreases because real income rises;c. Increases because the real value of wealth increases;d. Decreases because the real value of wealth decreases;e. Increases because nominal income increases;(billions of dollars);Net Investment=40;depreciation=30;indirect business taxes (net of subsidies)=25;Income earned but not received=50;income reveived but not earned=60;personal income taxes=20;net earnings of american resources abroad=10;compensation of employees=250;corporate profits=25;proprietors' income=30;rental income of persons=20;net interest=30;According to the data above, the Gross private domestic investment is equal to;a. $30 billion;b. $40 billion;c. $60 billion;d. $70 billion;e. $80 billion;According to the same data above, Net Domestic Product equals;a. $365 billion;b. $375 billion;c. $385 billion;d. $390 billion;e. $420 billion;If net exports increase by $400 billion at every level of income, the aggregate expenditure line will;a. Shift upward by $400 billion;b. Shift downward by $400 billion;c. Shift upward by more than $400 billion because of the multiplier effect;d. Shift upward by less than $400 billion;e. Shift downward by more than $400 billion because of the multiplier effect;When net exports are included in aggregate expenditure function, the spending multiplier;a. Increases;b. Decreases;c. Is affected only if exports are greater than imports;d. Is affected only if exports are less than imports;e. Is affected only if exports are equal to imports;The spending multiplier with variable net exports is;a. (1+MPC)/(MPM;b. 1/(1-MPC);c. 1/(1-MPC+MPM);d. 1/(1-MPC-MPM);e. MPC/MPM;Adding net exports to aggregate expenditure always;a. Increases real GDP;b. Shifts the aggregate expenditure line down;c. Increases the slope of the aggregate expenditure line;d. Decreases the slope of the aggregate expenditure line;e. Decreases GDP;If net exports increases by $350 billion at every level of income, the net export line will;a. Shift upward by $350 billion;b. Shift downward by $350 billion;c. Shift upward by more than $350 billion because of the multiplier effect;d. Shift upward by less than $350 billion;e. Shift downward by more than $350 billion because of the multiplier effect;Which of the following is true concerning the impact of net exports in the model with AE=C+I+NX+g?;a. Net exports are a leakage from the economy if imports exceed exports;b. Net exports are always positive;c. Net exports are negative because exports are assumed to be autonomous;d. Net exports must be negative if planned investment is positive;e. Net exports are an injection into the economy if imports equal exports;If variable net exports increase by the same amount at every level of income, then there is an upward and parallel shift of the net export line.;a. True b. False;The concept of variable net exports is that as domestic income (Y) increases;a. Exports will increase;b. Exports will decrease;c. Imports will decrease;d. Imports will increase;e. Imports and exports will remain constant

 

Paper#21729 | Written in 18-Jul-2015

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