Economics-Questions?

1.If MPC = .5. a simultaneous increase in both taxes and government spending of $20 will:

a) decrease GDP by $20

b) decrease GDP by $40

C) increase GDP by $20

d) increase GDP by $40

2. At the economy%26#039;s natural rate of unemployment:

a) the economy achieves its potential output.

b) there is only a relatively small amount of cyclical unemployment.

c) only frictional unemployment exists.

d) only structual unemployment exists.

3. an appropriate fiscal policy for a severe recession is:

a) a decrease in government spending

b) a decrease in tax rates

c) appreciation of the dollar

d) an increase in interest rates

4. suppose the government purposely changes the economy%26#039;s full-employment bufget from a deficit of 0 percent of real GDP to a deficit of 3 percent of real GDP. The government is engaging in a(n):

a) expansionary fiscal policy

b) contractionary fiscal policy

c) neutral fiscal policy

d) low-interest rate policy

Thanks for your help!

Economics-Questions?credit counseling

1) C

2)A

3)B

4)A