American Recovery and Reinvestment Act 2009 calls for
A) both tax reductions and government spending reductions.
B) both tax reductions and government spending increases.
C) both tax increases and government spending increases.
D) both tax increases and government spending reductions.
B
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Refer to Edgeworth Box Economy. In an Edgeworth box, points within the region of mutual advantage represent allocations that
a. can be achieved by a competitive market. b. both consumers prefer to the initial endowment. c. exhaust the potential gains from trade. d. are Pareto optimal.
When the price level declines
A) the interest rate falls, and consumers borrow more funds, which causes a movement down along the aggregate demand curve. B) interest rates fall, and consumers borrow more funds, which causes the aggregate demand curve to shift to the left. C) the interest rate rises, and consumers borrow fewer funds, which causes a movement up the aggregate demand curve. D) the interest rate is not affected, so there is no movement along the aggregate demand curve.
Refer to Figure 16-2. In the graph above, if the economy is at point A, an appropriate fiscal policy by Congress and the president would be to
A) execute an open market sale of government securities. B) increase marginal income tax rates. C) increase government transfer payments. D) lower the discount rate of interest.
One reason lenders usually require a lot of information from loan applicants is to avoid:
A. the problem of adverse selection. B. charges of discrimination in lending. C. the problems of moral hazard. D. being harmed by symmetric information.