Author Question: If an economy consumes 75 percent of any increase in real GDP and spends 10 percent of this ... (Read 64 times)

newbem · **on:** Jun 30, 2018

If an economy consumes 75 percent of any increase in real GDP and spends 10 percent of this increased income on imports, then a decline in government spending by 60 million will result in a total reduction in equilibrium income of:
a. 171.43 million.
b. 123.47 million.
c. 151.63 million.
d. 73.47 million.
e. 71.43 million.

Question 2

A downward-sloping demand curve illustrates
a. that demand increases.
b. that prices fall.
c. the relationship between income and demand.
d. the law of demand.