Which of the following is least likely to be the case?
A. Medicare changes the mix of output away from medical services.
B. Housing subsidies encourage the production of additional housing.
C. Food stamps encourage the production of more food.
D. Student loans change the mix of output in favor of educational services.
Answer: A
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In the above figure, if the interest rate is 8 percent
A) people sell bonds so as to convert them into money. B) people buy bonds and the interest rate falls. C) the Fed increases the quantity of money. D) people buy stocks, because stocks are more liquid than currency.
Explain what economists mean when they characterize the income tax system as progressive
What will be an ideal response?
Refer to Table 9-11. Which country has a comparative advantage in producing hats?
A) Denmark B) Belize C) both countries D) neither country
In the above figure, assume the aggregate demand of the economy is AD2 and the Fed actions move aggregate demand to AD1. In this situation, the Fed has practiced
A) contractionary monetary policy. B) expansionary monetary policy. C) irresponsible fiscal policy. D) Keynesian fiscal policy.