Assume in a Private Economy That the Equilibrium Level of Income

question 195

Multiple Choice

Assume in a private economy that the equilibrium level of income is $380 and the MPS is 0.25.Now suppose government collects taxes of $50 and spends the entire amount.As a result:

• A)the equilibrium level of real income and the price level will both remain unchanged.
• B)nominal wage rates will fall.
• C)the equilibrium level of income will rise to $420.
• D)the equilibrium level of income will rise to $430.

---

Definitions:

Information Technology

The use of computers and telecommunications equipment to store, retrieve, transmit, and manipulate data.

Task Force

A temporary group of people formed to accomplish a specific objective, often bringing together diverse expertise to address complex issues.

Waste Reduction

The process of minimizing the amount of waste generated by reducing, reusing, and recycling materials.

Future Search Conferences

A large group intervention method aiming to bring diverse people together to envision and plan their future collectively, focusing on common ground and positive action.