A decrease in the tax rate will ________ the disposable income of households and ________ the size of the multiplier effect
A) increase; increase
B) decrease; increase
C) increase; decrease
D) decrease; decrease
E) increase; not change
Answer: A
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A situation is efficient if it is:
A. not possible to find a transaction that will make at least one person better off without harming others. B. possible to find a transaction that will make everyone better off. C. possible to find a transaction that will make at least one person better off, even if others are made worse off. D. possible to find a transaction that will make at least one person better off without harming others.
How are net exports, net factor payments from abroad, and the current account balance related?
What will be an ideal response?
Equilibrium income equals planned autonomous spending
A) times the marginal propensity to consume. B) divided by the marginal propensity to consume. C) times the marginal propensity to save. D) divided by the marginal propensity to save.
During a period of inflation, the Fed is likely to:
a. sell government securities to banks in order to reduce the amount of loanable funds. b. buy government securities from banks in order to reduce the amount of loanable funds. c. raise taxes in order to reduce the money supply. d. cut the required reserve ratio in order to reduce the amount of excess reserves banks have to loan out. e. cut the discount rate in order to increase the affordability of loanable funds.