Which of the following correctly describes the mechanics of the spending multiplier?
a. An initial increase in aggregate expenditure, such as an increase in government spending, shifts the aggregate expenditure curve vertically upward.
b. An initial increase in aggregate expenditure, such as an increase in government spending, results in a movement along the aggregate expenditure curve to a higher level.
c. An initial increase in aggregate expenditure, such as an increase in government spending, results in a movement along the aggregate expenditure curve to a lower level.
d. An initial increase in aggregate expenditure, such as an increase in government spending, shifts the aggregate expenditure curve vertically downward.
a
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Why might a producer practice price discrimination?
A) to maximize profits B) to maximize quantity demanded C) to make its products more affordable to those with low incomes D) to maximize economic efficiency
The prevalent welfare policy is to
A. provide vocational training for welfare recipients, so that they can be self-supporting. B. provide government and private sector employment for those leaving the welfare rolls. C. to basically force welfare recipients to leave the welfare rolls. D. to allow welfare recipients to continue receiving benefits as long as there are children under six years of age in the family.
In Latavia, cultural pressures cause voluntary donations to orphanages to be very large; in Slobovia, people make smaller donations. If the governments of both countries suddenly grant a tax break to those donating money to orphanages, the basic postulate of economics predicts that donations
What will be an ideal response?
A decrease in saving that leads to an increase in the interest rate will:
A. Decrease the amount of investment spending B. Only result in a surplus of loanable funds C. Shift the demand for loanable funds to the right, increasing net investment D. Shift the demand for loanable funds to the left, causing a decrease in investment