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When an increase in government purchases increases the income of some people, and those people spend some of that increase in income on additional consumer goods, we have seen a demonstration of ? A. The multiplier effects B. supply side economics C. None of these answers D. The crowding out effect
Which of the following statements regarding taxes is correct ? A. Most economists believe that in the short run the greatest impact of a change in taxes is on aggregate supply, not aggregate demand B. An increase in taxes shifts the aggregate demand curve to the right C. A decrease in taxes shifts the aggregate…
Suppose a wave of investor and consumer optimisms has increased spending so that the current level of input exceeds the long-run natural rate If policy makers choose to engage in activist stabilization policy they should ? A. decrease government spending Which the shifts the aggregate demand curve to the left B. decrease taxes, which shifts…
If the marginal propensity of consume MPC is 0.75 the value of the multiplier is ? A. 4 B. 7.5 C. 5 D. 0.75
Suppose a wave of investor and consumer pessimism in the USA causes a reduction in spending If the US federal Reserve (Which has a broader remit than the Bank of England Which is charged only with controlling inflation) chooses to engage in activist stabilization policy it should ? A. Increase government spending and decrease taxes…
In the market for real output, the initial effect of an increase in the money supply is to ? A. shift the aggregate supply curve to the right B. shift the aggregate supply curve to the left C. shift the aggregate demand curve to the leftD. shift the aggregate demand curve to the right
When supply and demand for money are expressed in a graph with the interest rate on the vertical axis and the quantity of money on the horizontal axis an increase in the price level ? A. shifts money demand to the right and increases the interest rate B. None of these answers C. shifts money…
Keynes liquidity preference theory of the interest rate suggests that the interest rate is determined by ? A. aggregate supply and aggregate demand B. the supply and demand for loanable fundsC. the supply and demand for money D. the supply and demand for labor