1- Suppose that GDP equals 10, consumption C equals 6, government spending G equals 2, tax revenues T equal 3 and net exports NX equal 0. Then, the amount of investment is

Select one:

a. 3

b. 4

c. 2

d. 5

2- In order to influence spending on goods and services in the short-run, monetary policy is directed at directly influencing.

Select one:

a. Economic growth rates.

b. Interest rates.

c. Unemployment rates.

d. Inflation rates.

3- If the federal government borrows from households to pay for increased budget deficits, this will cause a decrease in planned investment and an increase in planned consumption.

Select one:

a. True.

b. False

4- Assume that the short-run aggregate supply curve is horizontal and the marginal propensity to consume is 0.75. Assuming no crowding out and no international trade, if the government wants to increase the equilibrium gross domestic product by NIS100 million, it should increase government spending by:

Select one:

a. NIS40 million

b. NIS75 million

c. NIS20 million

d. NIS25 million