Unformatted text preview: Blanchard Cp.3 Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) uppose an open economy is in equilibrium. Given this information, we know with certainty S 1) _______ that: A) = IM. X B) = I. S C) = T. G D) = Z. Y 2) n increase in taxes will cause: A 2) _______ A) o change in investment. n B) reduction in investment. a C) o change in autonomous spending. n D) n increase in investment. a 3) _______ 3) uppose the marginal propensity to consume equals .6 (i.e., c1 = .6). Given this information, S which of the following events will cause the largest reduction in output? A) increases by 300 T B) decreases by 250 I C) decreases by 300 G D) oth A and B b 4) uppose the consumption equation is represented by t...
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- Spring '08
- marginal propensity, autonomous consumption, ZZ line