If the government undertakes expansionary fiscal policy, it:
A. could increase income taxes.
B. expects aggregate demand to increase.
C. expects aggregate demand to decrease.
D. should force people to change their spending patterns.
B. expects aggregate demand to increase.
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The Central Bank of Baltonia decided to lower the interest rate that banks use to make loans to each other when the growth rate of Baltonia's output fell. What will be the effect of this policy on Baltonia's economy?
What will be an ideal response?
If your annual income rose by 10 percent and you increased your purchases of shoes from 2 pairs to 3 pairs each year, then your demand for shoes is
A) income inelastic and equal to 0.50. B) income elastic and equal to 1.50. C) income inelastic. D) income elastic.
If Sam decides to work, his
A) reservation wage is greater than his wage rate. B) reservation wage is less than his wage rate. C) value of marginal product is greater than his wage rate. D) value of marginal product equals his wage rate.
What are the reasons for the development and growth of the Eurodollar market?
What will be an ideal response?