If you save less because the government is going to tax you and later provide you with a benefit, then this reduction in savings is referred to by economists as the
A. asset substitution effect.
B. induced retirement effect.
C. slovenly effect.
D. bequest effect.
Answer: A
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Refer to Figure 18.4. With free trade, what is the equilibrium price of gloves in Duckland?
A) $0 B) $8 C) $9 D) $11
A relatively steep LM curve implies that wide fluctuations in the goods sector cause
A) wide fluctuations in real output. B) wide fluctuations in the price level. C) wide fluctuations in the interest rate. D) crowding out of private investment.
Which of the following is an example of a fiscal policy initiative?
a. Lowering of interest rates. b. Increase in reserve requirements. c. Reduction in taxes. d. Decrease in money supply.
In the long run, monetary growth
A. can change the unemployment rate while holding the inflation rate constant. B. can promote economic growth. C. cannot affect the factors that determine the economy's unemployment rate. D. can change the unemployment rate only at the cost of increased inflation.