1 / 1 pts Question 1 If the MPC is 0.80, and if the goal is to increase real GDP by $200 million, then by how much would government spending have to change to generate this increase in real GDP? $240 million.
5/8/2019 M13: Quiz: 00A-Spring 2019-Economics Fundamentals CAFE 2/6 $200 million. $180 million. $40 million. 1 / 1 pts Question 2 Which of the following would most likely occur if the federal government increased its spending and enlarged the size of the budget deficit during a period of full employment? The rate of inflation would decline. The rate of inflation would rise. A recession would develop. Interest rates would fall. 1 / 1 pts Question 3 If an economy were experiencing a high rate of unemployment as the result of insufficient aggregate demand, a Keynesian economist would favor: an increase in taxes coupled with a reduction in government expenditures of equal size. an increase in taxes.
5/8/2019 M13: Quiz: 00A-Spring 2019-Economics Fundamentals CAFE 3/6 a reduction in taxes, without any offsetting reduction in government expenditures. maintenance of a balanced budget. 1 / 1 pts Question 4 Programs that automatically increase government spending (relative to revenue) during a recession and automatically decrease government spending (relative to revenue)