In the aggregate expenditures model, an increase in government spending may:
A. decrease real GDP.
B. increase output and employment.
C. shift the aggregate expenditures schedule downward.
D. reduce the size of the inflationary gap.
B. increase output and employment.
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A decrease in ________ decreases the demand for money
A) the discount rate B) real GDP C) the interest rate D) the quantity of money
Bondholders and stockholders
A) never in agreement. B) are always in agreement. C) can disagree at times. D) never really interact.
Which of the following best explains the political attractiveness of debt financing relative to taxation?
a. Debt financing pushes the visible cost of government into the future. b. Debt financing exposes the current costs of government programs; taxes do not. c. Debt financing reduces the attractiveness of special-interest spending. d. Taxes allow politicians to supply voters with immediate benefits without having to impose a visible cost.
When price was 10, quantity demanded was 50. When price increased to 12, quantity demanded decreased to 40. Therefore, when price increased, total revenue
A. decreased from 500 to 480, indicating that demand is elastic. B. increased from 480 to 500, indicating that demand is elastic. C. decreased from 500 to 480, indicating that demand is inelastic. D. increased from 480 to 500, indicating that demand is inelastic.