The introduction of a tax by the government will:
a. have no effect on real GDP since real GDP comprises consumption expenditure, investment expenditure, and government expenditure.
b. affect consumption through a change in disposable income
c. affect consumption through its effect on investment.
d. affect government spending since the government levies the tax.
e. increase real GDP since it enables the government to increase spending.
b
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The demand for a resource is generally more
a. elastic in the short run because it takes time to alter the ratio of resources used in many production processes. b. inelastic in the short run because it takes time to alter the ratio of resources used in many production processes. c. elastic in the short run because an increase in the price of the resource may not be expected to last. d. inelastic in the short run because once resource suppliers find out they can charge a higher price, they will do so in the long run.
Which of the following trends is most likely the result of an expansionary monetary policy?
a. The demand for both costume jewelry and expensive jewelry rises. b. The demand for both economy cars and luxury cars drops. c. The demand for fast food drops, but the demand for gourmet food rises. d. The demand for cheap concert seats rises, but the demand for expensive seats drops.
Stagflation refers to a situation in which the economy is experiencing:
A. high economic growth and high inflation. B. low economic growth and high inflation. C. high economic growth and low inflation. D. low economic growth and low inflation.
Which of the following would be a macroeconomic question?
A. How have the retirement benefits in the auto industry changed over time? B. How has inflation increased over time? C. How has the price of gold increased over time? D. How has the number of commercial airline flights decreased over time?