When policy makers choose between tax policy and spending policy to affect the level of aggregate demand, they tend to choose on the basis of
a. how large a public sector they want.
b. how much they want to change aggregate demand.
c. how much they want to change aggregate supply.
d. which has the larger multiplier.
a
You might also like to view...
If regulators were to ensure that monopolistically competitive firms follow a marginal cost-pricing rule: a. new firms would be likely to enter the market
b. the most efficient firms would not likely be affected. c. all firms would experience losses. d. firms would operate at the most efficient scale.
The textile industry is composed of a large number of small firms. In recent years, these firms have suffered economic losses, and many sellers have left the industry. Economic theory suggests that these conditions will
a. shift the demand curve outward so that price will rise to the level of production cost. b. cause the remaining firms to collude so that they can produce more efficiently. c. cause the market supply to decline and the price of textiles to rise. d. cause firms in the textile industry to suffer long-run economic losses.
The modern Keynesian approach to cure a recession might include
A. Expanding the money supply or reducing government spending. B. Contracting the money supply or reducing government spending. C. Contracting the money supply or increasing government spending. D. Expanding the money supply or increasing government spending.
If you go to Europe to work and send funds home to your family living in the United States, this is known as a
A. service import. B. merchandise import. C. unilateral transfer. D. service export.