Author Question: Foreign repercussions of changes in domestic spending may cause: a. the GDP gap to be larger than ... (Read 33 times)

leilurhhh · **on:** Jun 30, 2018

Foreign repercussions of changes in domestic spending may cause:
a. the GDP gap to be larger than the recessionary gap.
b. the equilibrium income to increase by an amount equal to the change in net exports.
c. the actual spending multiplier to be larger than the reciprocal of the marginal propensity to save plus the marginal propensity to import.
d. equilibrium income to rise by a smaller amount than evidenced by the multiplier effect of autonomous spending increase.
e. the real GDP to be larger than potential GDP.

Question 2

If the demand for milk is downward sloping, then an increase in the price of milk will result in a(n):
a. increase in the demand for milk.
b. decrease in the demand for milk.
c. increase in the quantity of milk demanded.
d. decrease in the quantity of milk demanded.