In Country Z, the Government Simultaneously Increases Its Expenditures by $25

question 182

Multiple Choice

In Country Z, the government simultaneously increases its expenditures by $25 billion and increases taxes by $25 billion. If the MPS is equal to 0.2, the government's action ________ real GDP by ________.

• A)increases; $125 billion
• B)increases; $25 billion
• C)increases; $100 billion
• D)has no effect on; $0

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Definitions:

New England Seafood Chowder

A traditional creamy soup from the New England region made with seafood like clams and fish, potatoes, onions, and celery.

Lost Profits

Potential earnings or revenues that a business or individual did not realize due to an interruption, breach of contract, or other adverse events.

Breach of Contract

The violation of any of the agreed-upon terms and conditions of a binding contract without a legitimate legal excuse.

Consequential Damages

In a contract, foreseeable damages that result from special facts and circumstances arising outside the contract itself. The damages must be within the contemplation of the parties at the time the breach occurs. Also called special damages.