Discretionary fiscal policy designed to counteract a reduction in aggregate demand might include
A. an increase in the money stock.
B. increased government infrastructure spending.
C. a return to the gold standard.
D. all of the options are correct.
Answer: B
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Everything else held constant, an increase in autonomous planned investment spending will cause the IS curve to shift to the ________ and aggregate demand will ________
A) right; increase B) right; decrease C) left; increase D) left; decrease
Society's rate of time preference is
A) the extra amount people would be willing to pay to have consumption goods in the future instead of now. B) the value that people place on the time saved by purchasing capital goods rather than consumer goods. C) the extra amount people would be willing to pay to have consumption goods now instead of the future. D) is negative if people prefer present consumption to future consumption.
Explain what an asset bubble is, when an asset bubble would form, and why the bubble will eventually burst
What will be an ideal response?
When a firm exits a monopolistically competitive market, the individual demand curves faced by all remaining firms in that market will
a. shift in a direction that is unpredictable without further information. b. shift to the right. c. shift to the left. d. remain unchanged. It is the supply curve that will shift.