Use the above figure. Assuming that policy actions are unanticipated, if the economy is at point A and the policy makers want to get to point B, they could
A) decrease taxation. B) increase the money supply.
C) increase government spending. D) decrease the money supply.
D
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Based on this information, what would be the national standard for an allocatively efficient abatement?
Hypothetically, suppose a recent study of hazardous waste abatement (A) arrives at the following national estimates for abating chemical solvents: MSB = 100 – 0.75A and MSC = 20 + 0.50A, where A is measured in millions of tons per year, and costs are measured in millions of dollars.
The Keynesian model is basically
A) a long-run theory. B) a short-run theory. C) a combination of long- and short-run theories. D) a theory about the economy in both the long run and the short run.
A decrease in the price level will
a. increase the quantity of aggregate demand, shown as a downward movement along the existing aggregate demand curve b. decrease the quantity of aggregate demand, shown as an upward movement along the existing aggregate demand curve c. cause a rightward shift in the aggregate demand curve d. cause a leftward shift in the aggregate demand curve e. have no effect on the aggregate demand curve
The government should not attempt to balance the budget if
a. the economy is in a recessionary gap. b. actual GDP is below full-employment GDP. c. unemployment is rising. d. All of the above are correct.