An increase in government spending causes:
a. Aggregate supply to rise, which reduces the nation's average price level and increases real GDP.
b. Aggregate demand to rise, which increases the nation's average price level and reduces real GDP.
c. Always causes the passive deficit to rise.
d. Aggregate supply to rise, which reduces the nation's average price level and reduces real GDP.
e. Aggregate demand to rise, which increases the nation's average price level and increases real GDP.
.E
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Suppose we have an economy in which G = 1100, t = 0.26, Y = 3800, and YN = 4000. At Y, the actual deficit is
A) 60. B) 200. C) 112. D) 286. E) -60.
The Fed's power to set the required reserves of commercial banks:
a. provides a certain source of interest income for commercial banks. b. allows the Fed to control the lending ability of commercial banks and, thereby, control the money supply. c. prevents banks from hoarding too much vault cash. d. prevents commercial banks from earning excess profits.
In the short run when the number of firms in the market is fixed, the market supply curve is just the horizontal sum of all the firms' marginal cost curves.
Answer the following statement true (T) or false (F)
Increasing house prices
What will be an ideal response?