Which of the following statements is correct?
A) Demand pull inflation is caused by an increase in demand and an increase in supply.
B) Cost push inflation is the result of rising input costs pushing the aggregate demand curve to the left.
C) Demand pull inflation is caused by an increase in demand and an increase in the quantity supplied.
D) None of the above.
Answer: C
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Which of the following leads to the suppliers paying all of a tax?
A) The supply is perfectly elastic. B) The supply is perfectly inelastic. C) The demand is unit elastic. D) The demand is perfectly inelastic.
The economy is in a recessionary gap and there is complete crowding out. Furthermore, there is no evidence that the economy is in a liquidity trap or that investment is interest-insensitive. This makes the case for the use of __________ policy stronger than it might be otherwise
A) contractionary monetary B) contractionary fiscal C) expansionary fiscal D) expansionary monetary
What monetary policy should be implemented to correct an inflationary economy?
(A) Easy monetary policy (B) Money creation policy (C) Tight monetary policy (D) Laissez faire policy
Sharon pays a tax of $4,000 on her income of $40,000, while Brad pays a tax of $1,000 on his income of $20,000. This tax is:
A. regressive. B. progressive. C. proportional. D. a flat tax.