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Author Question: Assume the marginal propensity to consume (MPC) is 0.80 and the government increases taxes by 100 ... (Read 48 times)

moongchi

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on: Jun 30, 2018
Assume the marginal propensity to consume (MPC) is 0.80 and the government increases taxes by 100 billion. The aggregate demand curve will shift to the:
 a. left by 80 billion.
  b. right by 200 billion.
  c. right by 400 billion.
  d. left by 400 billion.

Question 2

According to the Monetarist view, the impact of expansionary monetary policy will be:
 a. the same in the long run as in the short run.
  b. the same regardless of whether the effects of the policy are anticipated or unanticipated.
  c. a higher price level (inflation).
  d. a decrease in short-run prices and an increase in long-run prices.


Bison

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Reply #1 on: Jun 30, 2018
Answer to Question 1

d

Answer to Question 2

c


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