Let C = 550 + 0.8y and I = 75. Assume no government or foreign sectors. If investment increases by 100, the equilibrium output increases by a total of
A) 60. B) 175. C) 500. D) 800.
Question 2
According to the U.S. Secret Service, approximately 2.6 billion of U.S. paper currency in circulation is counterfeit. As long as counterfeit U.S. currency remains undetected and in circulation, an increase in the U.S.
inflation rate would essentially
A) decrease the real value of the counterfeit currency.
B) increase the nominal value of the counterfeit currency.
C) increase the real value of the counterfeit currency.
D) decrease the nominal value of the counterfeit currency.
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