Suppose there is a tax cut. This tax cut would have a direct effect on which of the following?
A) financial wealth
B) housing wealth
C) human wealth
D) none of the above
C
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What impact does the Fed's raising the interest rate have on the money supply and on the price level?
A) An increase in interest rates raises the money supply and eventually reduces prices. B) An increase in interest rates lowers the money supply and raises the money demand, which will neutralize price increases. C) An increase in interest rates will increase investment spending and GDP, which will lower prices. D) An increase in interest rates reduces the money demand which will slow the growth in prices.
The SAS curve and the LAS curve
A) intersect at potential GDP. B) are parallel at potential GDP. C) are perpendicular to one another at potential GDP. D) None of the above answers is correct.
In the above figure, a negative relationship between price and quantity is shown in
A) Figure A. B) Figure B. C) both Figure A and Figure B. D) neither Figure A nor Figure B.
A decrease in the marginal propensity to save is likely to
A. Decrease physical capital investment. B. Have no effect on physical capital investment. C. Increase or decrease physical capital investment, depending on magnitude. D. Increase physical capital investment.