Refer to the information provided in Figure 27.2 below to answer the question(s) that follow.
Figure 27.2Refer to Figure 27.2. In response to a decrease in net taxes, the Fed would increase the interest rate by the greatest amount when the aggregate demand curve shifts from
A. AD1 to AD2.
B. AD3 to AD4.
C. AD5 to AD6.
D. AD6 to AD1.
Answer: C
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In the figure above, what would happen to the size of the multiplier if marginal income tax rates were increased?
A) The multiplier would fall in value and might become negative. B) The multiplier would not change in value. C) The multiplier would fall in value but would not become negative. D) The multiplier would rise in value. E) More information is needed to determine the effect on the size of the multiplier.
When plotted with the aggregate price level on the vertical axis and output on the horizontal axis, which of the following curves slopes downward?
A) SRAS B) AD C) LRAS D) None of the above
A monopolist will maximize profits by
a. setting the price at the level that will maximize per-unit profit. b. producing the output where marginal revenue equals total cost and charging a price along the demand curve. c. selling at the price on the demand curve at the output rate where marginal revenue equals marginal cost. d. producing at the output rate where price equals marginal cost.
An increase in the price of the U.S. dollar in terms of euros will cause, ceteris paribus,
A. A lower European inflation rate. B. European goods to be more expensive to residents of the United States. C. European goods to be cheaper to residents of the United States. D. Higher interest rates in the United States.