If an Economy Consumes 75 Percent of Any Increase in Real

question 75

Multiple Choice

If an economy consumes 75 percent of any increase in real GDP and spends 10 percent of this increased income on imports, then a decline in government spending by $60 million will result in a total reduction in equilibrium income of:

• A)$171.43 million.
• B)$123.47 million.
• C)$151.63 million.
• D)$73.47 million.
• E)$71.43 million.

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Definitions:

Direct Pay

Wages or salaries that employees receive directly from their employer as compensation for their labor.

Employment Insurance

A government program that provides financial assistance to unemployed workers who meet certain eligibility criteria.

Monetary Problems

Issues related to financial matters, such as budget constraints, inflation, or financial crises affecting organizations or individuals.

Transition

The process of changing from one state or condition to another, often used in the context of personal, professional, or organizational changes.