Starting from long-run equilibrium, an increase in autonomous consumption results in ________ output in the short run and ________ output in the long run.
A. higher; higher
B. higher; potential
C. lower; higher
D. lower; potential
Answer: B
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A congress member concerned about ensuring vertical equity in taxation would be most likely to argue for obtaining government revenue through a
a. progressive tax on personal income. b. regressive tax on corporate income. c. sales tax. d. head tax.
Which of the following can the government not use directly to control the economy?
a) Pay rates within the private sector b) Pay rates in the public sector c) Investment in state education d) Benefits available for the unemployed and sick
Suppose that at your current consumption of two goods, A and B, MUA/PA = 25 and MUB/PB = 20. In order to maximize, your utility you should:
A. purchase less of A and more of B. B. purchase more of A and less of B. C. leave your spending unchanged. D. purchase less of A and B.
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:
A. P1 and Y2. B. P2 and Y3. C. P3 and Y1. D. P2 and Y2.