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Assume that there are no crowding-out effects and the MPC for Canada is .8. By how much must the government increase spending to shift the aggregate demand curve right by $10 billion? $2 billion $3 billion $4 billion O $6 billion O $10 billion

Assume that there are no crowding-out effects and the MPC for Canada is .8. By how much must the government increase spending to shift the aggregate demand curve right by $10 billion? $2 billion $3 billion $4 billion O $6 billion O $10 billion

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Assume that there are no crowding-out effects and the MPC for Canada is .8. By how much must the government increase spending to shift the aggregate demand curve right by $10 billion? O $2 billion O $3 billion O $4 billion O $6 billion O $10 billion Influential economists, like John Keynes, believed in "lean against the wind" policy because he felt that the government should not use stabilization policy and simply let the economy "weather the storm." O True O False Wage contracts can fix wages and therefore inflation reduces O nominal wages; this likely makes labor markets more flexible. O nominal wages; this likely makes labor markets less flexible. O real wages; this likely makes labor markets more flexible. O real wages; this likely makes labor markets less flexible. When considering the short-run, what does the Phillips curve shows that O unemployment and inflation that arise in the short run as aggregate demand shifts the economy along the short-run aggregate supply curve. O unemployment and inflation that arise in the short run as short-run aggregate supply shifts the economy along the aggregate demand curve. O real GDP and the price level that arise in the short run as short-run aggregate supply shifts the economy along the aggregate demand curve. O real GDP and the price level that arise in the short run as aggregate demand shifts the economy along the short-run aggregate supply curve.
Transcribed Image Text:Assume that there are no crowding-out effects and the MPC for Canada is .8. By how much must the government increase spending to shift the aggregate demand curve right by $10 billion? O $2 billion O $3 billion O $4 billion O $6 billion O $10 billion Influential economists, like John Keynes, believed in "lean against the wind" policy because he felt that the government should not use stabilization policy and simply let the economy "weather the storm." O True O False Wage contracts can fix wages and therefore inflation reduces O nominal wages; this likely makes labor markets more flexible. O nominal wages; this likely makes labor markets less flexible. O real wages; this likely makes labor markets more flexible. O real wages; this likely makes labor markets less flexible. When considering the short-run, what does the Phillips curve shows that O unemployment and inflation that arise in the short run as aggregate demand shifts the economy along the short-run aggregate supply curve. O unemployment and inflation that arise in the short run as short-run aggregate supply shifts the economy along the aggregate demand curve. O real GDP and the price level that arise in the short run as short-run aggregate supply shifts the economy along the aggregate demand curve. O real GDP and the price level that arise in the short run as aggregate demand shifts the economy along the short-run aggregate supply curve.
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