11. If the marginal propensity to save is 0.25, 13. The term "value added" for a firm is best defined a $15 billion increase in government spending as which of the following? will lead to an increase in national income by (A) The firm's sales a maximum of (B) The firm's sales minus depreciation (A) $60 billion (C) The firm's sales minus its losses (B) $45 billion (D) The firm's sales minus the cost of inputs (C) $15 billion purchased from other firms (D) $11.25 billion (E) The firm's profits from its sales (E) $3.75 billion 14. An increase in a country's current account surplus 12. Assume the economy is currently in long-run will result in which of the following in the equilibrium. An increase in the money supply short run? will affect unemployment in the short run and in the long run in which of the following ways? (A) A decrease in the country's government budget surplus Short Run Long Run (B) A decrease in the country's national savings (A) Falls Falls (C) A decrease in the country's financial account deficit (B) Rises Rises D) An increase in the country's net financial (C) No change Remains at the capital outflows natural rate (E) An increase in the country's national debt (D) Rises above the Falls back to the natural rate natural rate 15. Using 2010 as the base year, the gross domestic (E) Falls below the Rises back to the product (GDP) deflator in 2011 was 97. Which natural rate natural rate of the following must be true? (A) The inflation rate in 2011 was positive. (B) The inflation rate in 2011 was negative. C) The inflation rate in 2011 was zero. (D) The purchasing power of a dollar decreased by 3 percent. (E) The real output increased by 3 percent.Peak Actual Real Output Contraction Expansion Potential Trough Time 16. According to the business cycle represented in the diagram above, the actual rate of unemployment equals the natural rate of unemployment when the economy is (A) in expansion (B) in contraction (C) at the peak at the trough (E) on the potential line