Q: The marginal propensity to consume (MPC) for the United States
The marginal propensity to consume (MPC) for the United States as a whole is roughly 0.90. Explain in words what this means. What is your personal MPC at this stage in your life? How might that change...
See AnswerQ: Look at the scatter diagram in Figure 3. What does it
Look at the scatter diagram in Figure 3. What does it tell you about what was going on in this country in the years 1942 to 1945?
See AnswerQ: Explain why permanent tax cuts are likely to lead to bigger increases
Explain why permanent tax cuts are likely to lead to bigger increases in consumer spending than temporary tax cuts do.
See AnswerQ: In 2001 and again in 2003, Congress enacted changes in the
In 2001 and again in 2003, Congress enacted changes in the tax law designed to promote saving. If such saving incentives had been successful, how would the consumption function have shifted?
See AnswerQ: Between 2008 and 2009, real disposable income (in 2009 dollars
Between 2008 and 2009, real disposable income (in 2009 dollars) declined slightly (by $19 billion), owing to a recession. The decline in real consumption expenditures was far larger: $133 billion. Exp...
See AnswerQ: For more than 30 years, imports have consistently exceeded exports in
For more than 30 years, imports have consistently exceeded exports in the U.S. economy. Many people consider this imbalance to be a major problem. Does this chapter give you any hints about why?
See AnswerQ: Comment on the following statement: “Inflationary and recessionary gaps are
Comment on the following statement: “Inflationary and recessionary gaps are nothing to worry about because the economy has a built-in mechanism that cures either type of gap automatically.”
See AnswerQ: Give two different explanations of how the economy can suffer from stagflation
Give two different explanations of how the economy can suffer from stagflation.
See AnswerQ: In a certain economy, the multiplier for government purchases is 2
In a certain economy, the multiplier for government purchases is 2 and the multiplier for changes in fixed taxes is 1.5. The government then proposes to raise both spending and taxes by $100 billion....
See AnswerQ: Why do you think wages tend to be rigid in the downward
Why do you think wages tend to be rigid in the downward direction?
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