If the MPC in an economy is .8, government could shift the aggregate demand curve rightward by $100 billion by:
A. increasing government spending by $25 billion.
B. increasing government spending by $80 billion.
C. decreasing taxes by $25 billion.
D. decreasing taxes by $100 billion.
C. decreasing taxes by $25 billion.
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When the Fed buys a U.S. bond in the open market
A) its action contracts total reserves and the money supply. B) total reserves increase by the amount of the purchase but the money supply stays the same. C) its action expands total reserves and the money supply. D) its action has no effect on the total reserves or the money supply because the check it writes increases reserves at one bank but they fall at another.
Explain how the standard of living of the average person in an economy can increase?
What will be an ideal response?
Regarding the causes of pollution, economists believe that:
a. the pricing system has failed. b. the public interest requires that pollution to be reduced below its market level. c. a firm pollutes the air and water because they are free. d. All of the above are correct.
A price support on agricultural products is labeled by economists as a
A. price ceiling. B. just price. C. price limit. D. price floor.