Other things equal, a reduction in income taxes would:
A. reduce productivity and reduce aggregate supply.
B. increase consumption and increase aggregate demand.
C. increase the supply of money and reduce investment.
D. increase government spending and increase aggregate demand.
B. increase consumption and increase aggregate demand.
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An increase in the price of oil ________ aggregate supply, shifting the aggregate supply curve ________ and potentially bringing the ________ phase of the business cycle
A) decreases; rightward; expansion B) increases; rightward; recession C) increases; rightward; expansion D) decreases; leftward; recession E) decreases; rightward; recession
Under a fixed exchange rate system, if the government decides to increase the fixed exchange rate, net exports will ________ and the IS curve will shift to the ________
A) increase; left B) increase; right C) decrease; left D) decrease; right
When workers purchase more leisure and work less at higher wages, the supply curve
a. is vertical. b. is horizontal. c. is positively sloped. d. is backward bending.
Maurice loses his job and decides to sit on the beach rather than looking for work the next few months. Other things the same, the unemployment rate
a. increases, and the labor-force participation rate is unaffected. b. increases, and the labor-force participation rate decreases. c. decreases, and the labor-force participation rate increases. d. decreases, and the labor-force participation rate decreases.