People increase their labor supply in response to a temporary increase in government purchases because
A) current or future taxes will increase, making them financially worse off.
B) they need to work more to keep up with their neighbors.
C) interest rates will rise, causing a substitution effect.
D) higher spending today will lead to higher spending in the future, as well.
A
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Considering the information in the table shown, if Jack decides to consume bundle D, we can conclude that Jack:
This table shows the different combinations of goods that Jack can consume, given that his income to spend on these two items is $10.
A. still has money left to spend.
B. is not maximizing his utility.
C. could consume more of both goods.
D. All of these are true.
The group with the highest incidence of poverty in 2010 was
a. women living in a household with no husband present. b. blacks. c. Hispanics. d. people under age 18.
An increase in the quality of items included in the Consumer Price Index would cause the index to
A. overstate the true amount of unemployment. B. overstate the true amount of inflation. C. understate the true amount of unemployment. D. understate the true amount of inflation.