The government has decided to give every person in the U.S. a $5 coupon that they can use at the grocery store to purchase their choice of cheese. We would expect this policy to lead to
A) an increase in aggregate demand but not equivalent to the full impact of all of the coupons redeemed due to some direct expenditure offset.
B) no increase in aggregate demand because there would be no direct expenditure offset.
C) an increase in aggregate demand equivalent to the full impact of all of the coupons redeemable.
D) no increase in aggregate demand due to the Ricardian equivalence theorem.
A
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If the price elasticity of demand for clothing is 0.64, this implies that
A) a 6.4 percent increase in price the price of clothing leads to a 10 percent decrease in the quantity demanded. B) a 10 percent increase in the price of clothing leads to a 6.4 percent decrease in the quantity demanded. C) if there is an increase in the price of clothing the total expenditures on clothing decreases. D) Both answers A and C are correct.
The view that the choices consumers face should be limited for their own good is known as ________
A) Keynesian theory B) institutionalist theory C) rational adaptations D) libertarian paternalism
The rights of state and local government to regulate, license and control businesses were taken away after the American Revolution
Indicate whether the statement is true or false
If a war interrupted oil production, which of the following would most likely happen in the short run?
a. Unit costs would decrease and there would be an upward movement along the aggregate supply curve. b. Unit costs would increase and the aggregate supply curve would shift upward. c. Unit costs would increase and the aggregate supply curve would shift downward. d. Unit costs would decrease and the aggregate supply curve would shift upward. e. Unit costs would increase and there would be movement along the aggregate supply curve.