Which one of the following would NOT increase aggregate demand?
A. a reduction in real interest rates
B. tax decreases
C. an increase in long-run aggregate supply
D. an increase in the amount of money in circulation
Answer: C
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Suppose that the sub sandwich business is a competitive, constant-cost industry. An increase in demand for sub sandwiches, will, in the long-run lead to
a. an increase in price and industry output, but no increase in the output of existing firms. b. no increase in price, no increase in the output of existing firms but an increase in industry output because of new firms. c. no increase in price and an increase in industry output as each existing firm produces more. d. no changes in price, output of existing firms or the number of firms in the industry.
An example of a payroll tax in the United States is
A) taxes on corporate profit. B) Social Security taxes. C) property taxes on real estate. D) excise taxes on gasoline.
Discuss four problems with the CPI. Does the CPI tend to overestimate or underestimate the true inflation rate? How big is this bias?
What will be an ideal response?
What brought about the end of the Bretton Woods Agreement?
What will be an ideal response?