If the government increases spending and raises taxes by just enough to finance this increase it will ?

A. Leave output unchanged
B. Increase output
C. Reduce output
D. Increase the mpc

The multiplier is calculated as___________?

A. 1(1-mpc)
B. 1/mps
C. 1/mpc
D. A or b

If a result of households wish to save more there is a change in equilibrium income and no change in equilibrium saving this is an example of ?

A. Market imperfection
B. The law of diminishing returns
C. The paradox of thrift
D. Market failure

When we refer to the hidden economy we mean unrecorded income owing to ?

A. Tax evasion
B. Poor statistics
C. The lags between statistical collection and publication
D. Smuggling

When investment is assumed to autonomous the slope of the AD schedule is determined by the ?

A. Marginal propensity to invest
B. Disposable incomes
C. Marginal propensity to consume
D. Average propensity to consume

In the circular flow we would expect leakages to ___________ injections?

A. Equal
B. Be less than
C. Be greater than
D. Be less or greater than

Real GNP measures income ?

A. Including non-market activities
B. Adjusted for inflation
C. Including externalities
D. Including tax evasion

In an economy measuring (1) total value added (2)total spending on final goods and (3)total factor earning gives the result that ?

A. 3>2>1
B. 3=2=1
C. 3<2<1
D. Any measure can be larger or smaller than any other

Leakages from the circular flow are _________ and __________?

A. Investment, savings, government expenditure
B. Savings, taxes net of subsidies imports
C. Consumption investment government expenditure
D. Consumption taxes imports

The underground economy consists of ?

A. Legal transactions
B. Part of the rail network
C. Legal transactions not declared for tax and illegal activities
D. The water distribution system