Which of the following will cause a movement along the demand curve for shoes?
A) an increase in the price of socks
B) an increase in income
C) an increase in the price of shoes
D) all of the above
C
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Increases in autonomous expenditure induce ________ in aggregate expenditure thereby making the multiplier ________
A) further increases; greater than one B) further increases; unnecessary C) further increases; less than one D) a decrease; less than one E) a decrease; greater than one
Which of the following is a basic assumption of the Ricardian equivalence theorem?
A) Consumers pay no attention to government budget deficits. B) Consumers think only in terms of the present. C) If current tax cuts result in budget deficit increases, aggregate supply falls. D) Consumers consider future tax payments when deciding how much to spend and save today.
If the graph shown is displaying a competitive market and the market is currently offering a wage more than P*:
A. there would be a shortage of workers who want to work at that wage.
B. there would be unemployment in the market.
C. firms would have a hard time finding employees.
D. other firms would increase demand and shift the equilibrium.
Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher