If it becomes more expensive for firms to hold excess capital and labor, the multiplier will
A. increase.
B. remain unchanged.
C. decrease.
D. either increase or decrease depending on the value of the MPC.
Answer: A
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The demand for cars in a certain country is given by: D = 20,000 - P, where P is the price of a car. Supply by domestic car producers is: S = 5,000 + 0.5.If this economy is open to trade, and the world price of a car is $6,000, and the government imposes a quota allowing 3000 cars to be imported, then domestic price of the car will be ________.
A. $6,000 B. $5,000 C. $10,000 D. $8,000
The short-run Phillips curve shifts when
A) the actual inflation rate changes and also when the expected inflation rate changes. B) the inflation rate increases and also when the unemployment rate decreases. C) the expected unemployment rate changes and also when the expected inflation rate changes. D) the natural unemployment rate changes and also when the expected inflation rate changes. E) the actual unemployment rate changes and also when the expected unemployment rate changes.
To "accommodate" an expansionary fiscal policy, the Fed ________ the money supply in order to hold ________ constant
A) expands, the interest rate B) expands, real income C) contracts, the interest rate D) contracts, real income
Briefly explain the case for a negative income tax.
What will be an ideal response?