At the market clearing price
A) there is neither a shortage nor a surplus.
B) quantity supplied equals quantity demanded.
C) the supply and demand curves intersect.
D) all of the above are correct.
Answer: D
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A stock market boom which causes stock prices to rise should cause
A) a decrease in consumption spending. B) a decrease in wealth. C) an increase in consumption spending. D) a decrease in net export spending.
Two important roles of government in the economy are to safeguard private property and enforce contracts
a. True b. False
A tax cut has a smaller impact on aggregate demand than an increase in government purchases of the same size because
A. A portion of the tax cut is saved. B. A portion of the tax cut is invested. C. The tax cut multiplier is equal to 1. D. Tax cuts do not increase disposable income.
To have more consumer goods in the future, we must
A) produce more capital goods today. B) lower current income. C) get government involved in the production process. D) stop producing all goods today.