When comparing a $100 billion increase in government expenditure to a $100 billion decrease in tax revenue, the effect of the increase in government expenditure on aggregate demand is
A) greater than the effect of the tax decrease.
B) equal to the effect of the tax decrease.
C) less than the effect of the tax decrease.
D) positive whereas the effect of the tax decrease is negative.
E) negative whereas the effect of the tax decrease is positive.
A
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The least responsive to interest rate changes is the ____ demand for money.
A. transactions B. precautionary C. speculative
Policymakers following a "lean against the wind" policy would
a. increase government expenditures when output is low and decrease them when output is high. b. increase government expenditures when output is low and do nothing when output is high. c. decrease government expenditures when output is low and increase them when output is high. d. decrease government expenditures when output is high and do nothing when output is low.
When deciding what to use as money, one characteristic to look for is its:
A. exchange value. B. convenience. C. shape. D. intrinsic value.
The cross price elasticity of demand between two goods will be positive if
A) the two goods are complements. B) the two goods are substitutes. C) the two goods are luxuries. D) one of the goods is a luxury and the other is a necessity.