The multiplier effect states that there are additional shifts in aggregate demand from fiscal policy, because it
a. reduces investment and thereby increases consumer spending.
b. increases the money supply and thereby reduces interest rates.
c. increases income and thereby increases consumer spending.
d. decreases income and thereby increases consumer spending.
c
You might also like to view...
A rise in domestic productivity tends to __________ domestic prices and causes the dollar to __________ relative to foreign currencies
A) raise; appreciate B) raise; depreciate C) lower; appreciate D) lower; depreciate
Refer to Figure 12.2. Suppose the economy is initially above potential GDP, and the actual inflation rate is greater than the expected inflation rate
If the Fed wants to achieve the goal of price stability, this would be represented by a movement on the Phillips curve from A) point A to point B. B) point C to point B. C) point B to point A. D) point A to point B to point C.
In the short run, producer surplus equals
a. TR - VC b. TR - AVC c. TR + VC d. TR - AFC e. TR + TC
If the typical firm in a perfectly competitive market was depicted in the graph below, what would be most likely to occur?
A. New firms would be likely to enter, increasing the market price. B. New firms would be likely to enter, decreasing the market price. C. Existing firms would be likely to exit, increasing the market price. D. Existing firms would be likely to exit, decreasing the market price.