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A 5% increase in GDP which is currently $6,000,000,000 would be $300,000,000. A 5% increase in GDP would require less than a 5% increase in spending due to the multiplier effect. Every dollar of government spending will be spent and re-spent in the circular flow of economic activity. For example, if road construction is authorized, government spending for materials and workers will be spent again by the materials suppliers and the hired workers. Thus, the boost to the economy will be more than 5%. If the MPC (Marginal Propensity to Consume) is .8, then the MPS (Marginal Propensity to Save) must be .2, because together the percentages must add up to 1. Thus, the spending multiplier is 1 / (1 - MPC). In this example, it would be 1 / .2 or 5. That means that each dollar of government spending will generate 5 times that much GDP. To increase GDP by $300,000,000, therefore would take an increase of $300,000,000/5 or $60 million.
Two resources are said to be substitutes when the change in the price of one leads to a change in demand for another which leads to:
The main purpose of blanching vegetables before freezing is to
The inability of a household or an individual to meet the minimum daily food requirements for a long period of time is known as
Crops cultivated to catch the forthcoming season when main crop has failed are called ___
While using Aluminium Phosphide which of the following things should be kept in mind?
At Stage II of production, the elasticity of production is
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The age of the tree is determined by
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International centre for Agricultural Research in Dry Areas (ICARDA) is located at
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