Fiscal policy refers to the
A. adjustment of government spending and taxes in order to achieve certain national economic goals.
B. government policy that aims at raising the market prices of certain goods.
C. adjustment of national income data to account for price level changes.
D. manipulation of the money supply in order to increase the amount of cash that the government holds.
Answer: A
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When the price of a product increases, consumers shift their purchases to other products whose prices are now relatively lower. This statement describes
A. an inferior good. B. the substitution effect. C. the income effect. D. the rationing function of prices.
Suppose you place $500 into a savings account that will pay you 6% interest per year. What will be the future value of the savings account in 15 years?
"If we come to a company's rescue this time, they'll take more risks and we'll have to come to their rescue next time, too." The economist who said this most likely
A) believes that the AS curve is upward-sloping. B) prefers monetary policy to fiscal policy when it comes to stabilizing the economy. C) is against bailouts. D) prefers increases in government spending to tax cuts when it comes to stimulating the economy from the demand side. E) none of the above
A country with a lot of land relative to its population may have a comparative advantage in:
A. capital-intensive activities. B. labor-intensive activities. C. technology-intensive activities. D. land-intensive activities.