According to this Application, some economists believe that ...

[humphriesbr@me.com]

According to this Application, some economists believe that recessions which are caused by ________ normally have ________ recoveries.
 
  A) high oil prices; faster B) financial crises; faster
  C) high oil prices; slower D) financial crises; slower

Question 2

Suppose policy makers want to increase GDP by 450 billion. If the marginal propensity to consume is 0.9, by how much must taxes decrease to achieve this target?
 
  What will be an ideal response?

[mjenn52]

Answer to Question 1

D

Answer to Question 2

The tax multiplier would be -9 in this case, so taxes must decrease by 50 billion.

[humphriesbr@me.com]

Excellent

[olderstudent]

Thanks for the timely response, appreciate it