Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C
B. B; C
C. B; A
D. D; B
Answer: D
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When President Obama took office in January 2009, he pledged to pursue an expansionary fiscal policy to try to pull the economy out of the recession
The next month, Congress passed the American Recovery and Reinvestment Act of 2009, a $840 billion package of ________ that was the largest fiscal policy action in U.S. history. A) interest rate reductions and increases in the money supply B) treasury bond purchases and mortgage-backed securities purchases C) commercial and investment bank bailouts D) spending increases and tax cuts
Refer to Table 2-11. What is South Korea's opportunity cost of producing one digital camera?
A) 0.05 pounds of wheat B) 20 pounds of wheat C) 25 pounds of wheat D) 60 pounds of wheat
Consistent with the mercantilist theory, the colonies had
(a) a trade deficit with England. (b) a trade surplus with England. (c) a balance of trade with England. (d) about an equal number of annual trade deficits and surpluses over the years.
Economists normally assume people's preferences should be
a. respected. b. adjusted. c. overruled. d. ignored.