Which of the following will shift the aggregate demand curve to the left?
A. Foreign economies fall into recession, reducing their demand for domestic exports.
B. Consumers become optimistic about the future.
C. The government increases spending on education.
D. Income taxes are lowered.
Answer: A
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The U.S. government restricts the production of peanuts by limiting production licenses. By also prohibiting imports, the government maintains prices well above levels peanut farmers would obtain if supply were not restricted. This program has the same effect as a
A. price ceiling. B. price floor. C. opportunity cost. D. shortage. E. efficiency move.
The division of labor helps to explain why workers do not consume most of what they produce
a. True b. False Indicate whether the statement is true or false
Government bureaus are likely to be very inefficient because:
a. they are overly concerned with profit-maximization b. they face intense competition c. they seek to fulfill their mission and then dissolve d. none of the above
Which financial intermediary primarily exists to issue residential mortgages?
a. mutual funds b. insurance companies c. banks d. savings and loans