Ceteris paribus, if income was transferred from individuals with a low MPC to those with a high MPC, aggregate demand would
A. Stay the same.
B. Decrease.
C. Increase.
D. Increase or decrease, but not because of the MPC.
Answer: C
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The process whereby votes are exchanged to gain support for legislation is referred to as
A) logrolling. B) rational ignorance. C) simple majority voting. D) special interest voting. E) a and d
Explain how potential gains from further reductions in tariff levels are different from the gains of the past
What will be an ideal response?
Refer to the diagram. If aggregate supply is AS 1 and aggregate demand is AD 0 , then:
A. at any price level above G a shortage of real output would occur.
B. F represents a price level that would result in a surplus of real output of AC.
C. a surplus of real output of GH would occur.
D. F represents a price level that would result in a shortage of real output of AC.
The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A