Consider a hypothetical closed economy in which households spend $0.75 of each additional dollar they earn and save the remaining $0.25. The marginal propensity to consume (MPC) for this economy is , and the expenditure multiplier for this economy is. Suppose the government in this economy decides to decrease government purchases by $250 billion. The decrease in government purchases will lead to a decrease in income, generating an initial change in consumption equal to. This decreases income yet again, causing a second change in consumption equal to. The total change in demand resulting from the initial change in government spending is.

What is the relationship between marginal external cost, marginal social cost, and marginal private cost? a. marginal social cost equals marginal private cost plus marginal external cost. b. marginal private cost plus marginal social cost equals marginal external cost. c. marginal social cost plus marginal external cost equals marginal private cost. d. marginal external cost equals marginal private cost minus marginal social cost. marginal external cost a. is expressed in dollars, so it is not an opportunity cost b. is an opportunity cost borne by someone other than the producer c. is equal to two times the marginal private cost d. is a convenient economics concept that is not real

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Newton industries is considering a project and has developed the following estimates: unit sales = 4,800, price per unit = $67, variable cost per unit = $42, annual fixed costs = $11,900. the depreciation is $14,700 a year and the tax rate is 34 percent. what effect would an increase of $1 in the selling price have on the operating cash flow?