If the Federal Reserve wanted to expand the money supply in order to increase output, it should
a. sell government bonds, which will increase the money supply; this will cause interest rates to fall and aggregate demand to rise.
b. buy government bonds, which will increase the money supply; this will cause interest rates to fall and aggregate demand to rise.
c. increase the discount rate, which will raise the market rate of interest; this will cause both costs and prices to rise.
d. decrease taxes, which will reduce costs and cause prices to fall.
B
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The law of diminishing marginal utility states that:
a. additional utility increases with each unit added. b. utility is equal to the number of units acquired. c. utility grows as units become scarcer. d. additional utility decreases with each unit added.
Table 11-1 Y = C + I + G C = 500 + 0.8(Y?T) I = 300 G = 700 T = 0.25Y Refer to Table 11-1. What is the level of saving in this model?
A. 92.5 B. 72.5 C. 62.5 D. 52.5 E. 42.5
If personal income taxes and business taxes increase, then this will:
A. decrease aggregate demand and increase aggregate supply. B. decrease aggregate demand and aggregate supply. C. increase aggregate demand and decrease aggregate supply. D. increase aggregate demand and aggregate supply.
Which of the following is not an advantage of starting a new business as a sole proprietorship?
A) separation of ownership and business liability B) limited control over the operation of the business C) the initial cost in setting up the business D) possibility of double taxation