Suppose that a firm spends 200,000 to build a factory in 2012 ...

[Awilson837]

Suppose that a firm spends 200,000 to build a factory in 2012 that is expected to have a life of 10 years. As a result, GDP in 2012 will increase by:
 
  a. 20,000
  b. 200,000
  c. You need to know the selling price of the factory to answer this question.
  d. It depends upon the tax law regarding depreciation.

Question 2

If the Federal Reserve pegs the interest rate, then in the IS-LM framework, the LM schedule
 
  a. is vertical.
  b. becomes horizontal.
  c. slopes upward to the right.
  d. slopes downward and the left.

[stillxalice]

Answer to Question 1

B

Answer to Question 2

B