Which of the following statements best explains the effects of transfer payments and taxes on aggregate spending?
What will be an ideal response?
Transfer payments and taxes affect aggregate spending indirectly by first changing disposable income and thereby changing consumption.
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People often choose to specialize and trade because:
A. it will allow them to enjoy more goods than they can create on their own. B. they can consume a bundle of goods on their production possibilities frontier. C. it always allows them to produce at a point beyond their own production possibilities frontier. D. they can take advantage of another nation’s poor choices.
State-chartered banks that are members of the _____________ System are examined by the Federal Reserve.
Fill in the blank(s) with the appropriate word(s).
Which would most likely increase aggregate supply?
a. A decrease in net exports b. A decrease in the prices of resources c. An increase in the degree of excess capacity d. A decrease in subsidies for businesses
The U.S. economy in the mid-2000s did not experience stagflation because
A. energy prices declined. B. the energy content of GDP declined. C. it became more volatile since 1980. D. All of these responses are correct.