At a given output level, a temporary reduction in government purchases will
A. increase desired saving, causing the IS curve to shift down and to the left.
B. increase desired saving, causing the IS curve to shift up and to the right.
C. decrease desired saving, causing the IS curve to shift up and to the right.
D. decrease desired saving, causing the IS curve to shift down and to the left.
Answer: A
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Refer to the market diagram. Of the surplus that consumers lose because there is a monopoly (and not perfect competition), how much is lost to the monopoly itself?
The following questions refer to the accompanying market diagram. PC and QC are the equilibrium price and quantity if the firm behaves competitively, and PM and QM are the equilibrium price and quantity if the firm is a simple monopoly.
a. Area C + D
b. Area E + H
c. Area A + B
d. Area C + D + E
All of the following would increase the growth rate of the economy EXCEPT
A) raising the saving rate. B) stimulating research and development. C) discouraging international trade. D) None of the above answers is correct because they all would increase the growth rate.
Fed Chairman Alan Greenspan managed to keep the rate of inflation low as the economy was growing at a brisk pace by setting and hitting low money supply growth rate targets
Indicate whether the statement is true or false
Arlene quits her $125,000-a-year job to take care of her ailing parents. What is the opportunity cost of her decision?
A) at least $125,000 B) It depends on the "going rate" for home-care providers. C) the value she attributes to the satisfaction she receives from taking care of her parents D) zero, since she will no longer be earning a salary