16.An economy is employing 5 units of capital, 5 units of raw materials, and 10 units of labor to produce its total output of 100 units. Each unit of capital costs $10; each unit of raw materials, $4; and each unit of labor, $3. The per-unit cost of production in this economy is

• $1.00.
• $20.00.
• $0.10.
• $0.50.

17.If the MPC in an economy is 0.9, a $4 billion increase in government spending will ultimately increase consumption by

• $36 billion.
• $4 billion.
• $0.9 billion.
• $40 billion.

18.In a private closed economy where MPC = 0.9, if consumers reduce their spending by $5 billion and firms cut investments by $4 billion, then equilibrium GDP will decrease by

• $90 billion.
• $20 billion.
• $45 billion.
• $9 billion.

19.If the multiplier in an economy is 4, a $20 billion increase in net exports will

• increase GDP by $80 billion.
• reduce GDP by $5 billion.
• decrease GDP by $80 billion.
• increase GDP by $20 billion.

20.If the MPC in an economy is 0.8 and aggregate expenditures increase by $10 billion, then equilibrium GDP will increase by

• $50 billion.
• $8 billion.
• $80 billion.
• $20 billion.