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natali 33 [55]
3 years ago
5

Suppose government belives the simple Keynesian model is descriptive of the current economy. Conress wants to lower Real Gdp by

$100 billion. The marginal propensity to consume is 0.80 Congress raises tax by:______
a. $28 billion
b. $15 billion
c. $29 billion
d. $22 billion
d. None of the above
Business
1 answer:
vichka [17]3 years ago
8 0

Answer:

d. None of the above

Explanation:

if the marginal propensity to consume = 0.80, the Keynesian's multiplier = 1 / (1 - MPC) = 1 / (1 - 0.8) = 1 / 0.2 = 5

that means that if Congress wants to decrease real GDP by $100 billion and the Keynesian's multiplier is 5, then it should raise taxes by $20 billion. This way -$20 billion (taxes take away money from the economy) x 5 = -$100 billion.

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3 years ago
Gary, a new salesperson for a reputed cellphone manufacturer, meets the owner of a transport company that employs 50,000 people
qaws [65]

Answer:

Option B. It is unrealistic

Explanation:

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Option A is incorrect because the assumption is less qualitative as it doesn't relies on realistic assumption.

The cab drivers sales are relevant here but the sales assumption was unrealistic (Highly optimistic assumption) so the option C and D are incorrect.

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6 0
3 years ago
Yasmine plans to attend a four-year public university. She expects she will need to contribute $9,000 annually to her education.
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7 0
3 years ago
Read 2 more answers
Suppose that a large lake in the middle of Minnesota evaporates, leaving more fertile farm land for growing corn available. Assu
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Wages would fall as the number of workers available grows. Landowners in Louisiana will earn more rent as the demand for land increases.

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The law of supply and demand is still in effect:

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When the quantity required increases without the quantity supplied increasing, the price rises.

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7 0
2 years ago
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