The aggregate demand increases, if
A) the government increases spending.
B) the Fed sells government bonds.
C) the government increases taxes.
D) the Fed raises the discount rate.
Answer: A) the government increases spending.
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John's utility of wealth curve is shown in the above figure. He currently has total wealth of $20,000. If there is a 50 percent chance that his $10,000 car will be stolen, what is the value of insurance against the theft?
A) $0 B) $5,000 C) $7,000 D) $13,000
The negative relationship between unemployment and inflation is known as the
A) aggregate supply curve. B) aggregate demand curve. C) Phillips curve. D) efficiency wage line.
If the federal government's expenditures are less than its tax revenues, then
A) a budget surplus results. B) a budget deficit results. C) the budget is balanced. D) No conclusion can be drawn here regarding the budget surplus or deficit without information regarding government purchases versus other outlays.
Refer to the graph. Other things equal, an increase in the price of a complementary resource would cause a:
A. move from a to b on D 1 .
B. shift from D 2 to D 3 .
C. shift from D 3 to D 2 .
D. move from b to a on D 1