If autonomous investment spending falls as a result of a decline in the expected rate of return on investment, GDP would not have to fall if the government __________ taxes or __________ government spending
A) increased; increased
B) increased; decreased
C) decreased; increased
D) decreased; decreased
C
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If an excise tax is imposed on shoes,
a. government tax revenue will fall b. the market price of shoes will decrease c. the supply curve will shift downward d. the equilibrium quantity demanded will decrease e. the equilibrium quantity supplied will increase
For an imaginary economy, the consumer price index was 80 in 2014, 100 in 2015, and 140 in 2016 . Which of the following statements is correct?
a. If the basket of goods that is used to calculate the CPI cost $40 in 2014, then that basket of goods cost $60 in 2015. b. If the basket of goods that is used to calculate the CPI cost $25 in 2015, then that basket of goods cost $35 in 2016. c. The overall level of prices increased by 60 percent between 2014 and 2016. d. All of the above are correct.
Does voluntary exchange create wealth?
A) Yes, exchange makes it possible for the trading partners to gain more value from the existing supply of goods and it also makes larger output levels possible. B) Uncertain, it will increase wealth if it creates more goods and services; otherwise it exerts no impact on the wealth of people. C) No, if one person gains, the other party must lose an equal amount. D) No, exchange merely shuffles the existing supply of goods and services among people.
The federal government spends the largest amount of its budget on Social Security, which is an example of
a. federal aid to state and local government b. discretionary spending ' c. mandatory spending d. defense spending