Assume that C = $1,500 + 0.80(Y) and intended investment = $500 . Then the equilibrium level of national income is
a. $24,000
b. $20,000
c. $19,000
d. $15,000
e. $10,000
E
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The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
In the above figure, Brendan originally consumes at point A. If his income falls and compact discs are a normal good but haircuts are an inferior good then he will begin consuming at a point such as
A) B. B) E. C) F. D) G.
In the long-run ISLM model and with everything else held constant, as long as the level of output ________ the natural rate level, the price level will continue to ________, shifting the LM curve to the ________, until finally output is back at the
natural rate level. A) exceeds; rise; right B) exceeds; rise; left C) remains below; fall; left D) remains below; rise; right
Edgar Browning and William Johnson, in a paper published in the Journal of Political Economy (1984), presented evidence that a one-dollar transfer to the bottom 40 percent of income distribution costs the top 60 percent nine dollars. If correct, this finding proves
a. the tax system is generating significant excess burdens. b. these transfers are not worth the cost. c. loopholes have to be closed. d. the burden of the tax system is too great.