When we add a personal income tax to the macroeconomic model, the
A. multiplier becomes larger.
B. multiplier becomes smaller.
C. expenditures schedule shifts upward.
D. expenditures schedule becomes steeper.
Answer: B
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The table above gives the supply schedule for a product. Using the midpoint method, find the price elasticity of supply between points A and B, between B and C, between C and D, and between D and E
What will be an ideal response?
Government purchases are part of _______ and include _______
a. national income; federal and state government purchases b. GDP; federal, state, and local government purchases c. GDP; federal government purchases only d. national income; federal government purchases only e. national income; federal, state, and local government purchases
A positive demand shock causes the aggregate demand curve to undergo an ______ shift.
a. anticipated rightward b. unexpected rightward c. anticipated leftward d. unexpected leftward
Exhibit 20-4 Aggregate demand and supply model
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In Exhibit 20-4, which one of the following actions could the Fed use to shift the AD curve from AD1 to AD2?
A. raise the legal reserve requirement B. raise the discount rate C. increase the federal funds rate D. buy government securities