Assume there is no government or foreign setor, If the MPC is 75 a Rs20 million decrease in planned investment will cause aggregate output to decrease by ?

Related Mcqs:

1. The Phillips curve is an extension of the model of aggregate supply and aggregate demand because, in the short run, an increase in aggregate demand increase price and ?

   A. decreases unemployment
   B. decrease growth
   C. increases unemployment
   D. decreases inflation

2. Assuming there is no government or foreign sector, if the multiplier is 2.5 the MPC is ?

   A. 4
   B. 25
   C. 6
   D. 2.5

3. Assuming there is no government or foreign sector, if the MPC is 8 the multiplier is ?

   A. 5
   B. 8
   C. 2
   D. 1.25

4. Assume identical interest rates on comparable securities in the United States and foreign countries. Suppose investors anticipate that in the future the U.S dollar will depreciate against foreign currencies. investment funds would tend to ?

   A. flow from the United States to foreign countries
   B. flow from foreign countries to the United States
   C. remain totally in foreign countries
   D. remain totally in the United States

5. Suppose the economy is initially in long-run equilibrium Then suppose there is an increase in military spending due to rising international tensions According to the model of aggregate demand and aggregate supply what happens to prices and output in the long run ?

   A. Output falls; prices are unchanged from the initial value
   B. Price fall; output is unchanged from its initial value
   C. Output and the price level are unchanged from their initial values
   D. Prices rise; output is unchanged from its initial value

6. Suppose the economy is initially in long run equilibrium Then suppose there is a drought that destroys much of the wheat crop if policymakers allow the economy to adjust to long-run equilibrium on its own, according to the model to aggregate demand and aggregate supply what happens to prices and output in the long run ?

   A. Output rises; prices are unchanged from the initial value
   B. Output and the price level are unchanged from their initial values
   C. Output falls; prices are unchanged from the initial value
   D. Prices fall; output is unchanged from its initial value

7. Suppose the economy is initially in long-run equilibrium Then suppose there is an increase in military spending due to rising international tensions According to the model of aggregate demand and aggregate supply what happens to prices and output in the short run ?

   A. Price fall; output rises
   B. Price fall; output falls
   C. Price rise; output fall
   D. Price rise; output rise

8. Suppose the economy is initially is long run equilibrium Then suppose there is a drought that destroys much of the wheat crop According to the model of aggregate demand and aggregate supply, what happens of prices and output in the short run ?

   A. Price rise; output falls
   B. Price fall; output rises
   C. Price rise; output rises
   D. Price fall; output falls

9. According to the model of aggregate supply and aggregate demand in the long run an increase in the money supply should cause ?

   A. Prices to rise and output to rise
   B. Price to fall and output to remain unchanged
   C. Prices to fall and output to fall
   D. prices to rise and output to remain unchanged

10. Assume that global recession causes the quantity of tin demanded to decrease by 4 million pounds at each price To maintain the price of tin at the target price you would ?

    A. sell 4 million pounds of tin
    B. sell 8 million pounds of tin
    C. buy 4 million pounds of tin
    D. buy 8 million pounds of tin