An decrease in taxes shifts aggregate demand
a. to the right. The larger the multiplier is, the farther it shifts.
b. to the right. The larger the multiplier is, the less it shifts.
c. to the left. The larger the multiplier is, the farther it shifts.
d. to the left. The larger the multiplier is, the less it shifts.
a
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In order to maintain stable prices, a central bank must
a. maintain low interest rates. b. keep unemployment low. c. tightly control the money supply. d. sell indexed bonds.
Refer to the graph shown. The areas that represent the net gain to society of eliminating the monopoly are:
A. A and B. B. A and C. C. D and B. D. D and C.
The GDP deflator
A. Is the price index based on a fixed basket of goods and services for the government. B. Is the broadest price index, covering all output. C. Is the best measure of inflation for consumers. D. Reflects the price changes felt by producers but not consumers.
Assume that the current interest rate is 7%. You invest $10,000 of your own money in a restaurant that you own and operate. The normal return on this investment is
A. $10,700, the amount invested plus the interest charge on the investment. B. $700, as that is the interest forgone by not lending the money to someone else at a 7% interest rate. C. $10,000, as that is the amount invested in the restaurant. D. $0, as you used your own money.