To fight recession, the government may
A. decrease aggregate demand, which will also lead to lower unemployment rates.
B. increase aggregate demand, which will also lead to higher price levels.
C. increase aggregate demand, which will also lead to lower price levels.
D. decrease aggregate demand, which will also lead to higher unemployment rates.
Answer: B
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The supply-side effects of a change in taxes on labor income means that ________ in taxes on labor income shifts the ________
A) an increase; labor supply curve leftward B) a decrease; labor demand curve rightward C) an increase; labor supply curve rightward D) a decrease; labor demand curve leftward E) an increase; labor supply curve leftward and the labor demand curve rightward
________ in the expected future domestic exchange rate causes the demand for domestic assets to decrease and the domestic currency to ________, everything else held constant
A) An increase; appreciate B) An increase; depreciate C) A decrease; appreciate D) A decrease; depreciate
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The economy is currently at Point B. The opportunity cost of moving from Point B to Point A is the
A. 120 LCD TVs that must be forgone to produce 20 additional OLED TVs. B. 30 LCD TVs that must be forgone to produce 40 additional OLED TVs. C. 20 OLED TVs that must be forgone to produce 30 additional LCD TVs. D. 40 OLED TVs that must be forgone to produce 120 additional LCD TVs.
If the inflation rate is 5% and the real interest rate is 4%, then the nominal interest rate is around
A. 1%. B. -1%. C. 20%. D. 9%.