Which action will tend to decrease aggregate supply according to supply-side economists?
A. A decrease in government spending
B. An increase in the stock of capital
C. A decrease in the money supply
D. An increase in marginal tax rates
D. An increase in marginal tax rates
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Amy can produce either 5000 pounds of cheese or 20 cars per year. Mike can produce either 5000 pounds of cheese or 10 cars per year. By the principle of comparative advantage, Mike should specialize in producing
A. cars. B. neither cheese nor cars. C. both cheese and cars. D. cheese.
The table above gives data for the nation of Pearl, a small island in the South Pacific. When the economy is at full employment the price level is
A) 150. B) 110. C) 130. D) 140. E) 120.
If the nominal interest rate is 8 percent and the current inflation rate is 3 percent, approximately what is the real interest rate?
A) 11 percent B) 8 percent C) 5 percent D) 3 percent
How does Adam Smith's idea of the "invisible hand" apply to the various parts, made by many different manufacturers in many different countries, that are used by Apple to produce an iPad?
What will be an ideal response?