Recall the Application about the policies used by the European Union to support the agricultural sectors of is member countries to answer the following question(s). According to this Application, the policies used by the European Union to support the agricultural sectors of its member countries created excess supply. This would occur if these policies set a ________ price which was ________ the market equilibrium price.
A. maximum; above
B. maximum; below
C. minimum; above
D. minimum; below
Answer: C
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In a certain economy, the components of aggregate spending are given by: C = 500 + 0.8(Y - T) - 300rI = 200 - 400rG = 200NX = 10T = 150Given the information about the economy above, the immediate impact on aggregate expenditures of a one-percentage-point increase in the real interest rate (r) from 5 percent to 6 percent is ________, and the eventual impact on short-run equilibrium output is ________.
A. an increase by 700 units; a decrease by 3,500 units. B. a decrease by 35 units, a decrease by 35 units. C. a decrease by 7 units, a decrease by 35 units. D. an increase by 35 units; a decrease by 175 units.
In a proportional tax system each individual would pay the same percentage of his or her income in taxes
a. True b. False Indicate whether the statement is true or false
What is the main cause of high inflation rates in middle and low income countries?
a. Citizens save most of their income lowering aggregate demand. b. Citizens spend most of their income pushing up prices. c. The government pays for its budget deficits by printing money. d. The government pays for its budget surplus by printing money.
If policy makers do nothing in a recessionary gap, the most likely outcome is a
a. drop in the inflation rate and a rise in the unemployment rate. b. drop in the inflation rate and a drop in the unemployment rate. c. rise in the inflation rate and a drop in the unemployment rate. d. rise in the inflation rate and a rise in the unemployment rate.