An example of a discretionary fiscal policy is when...
What will be an ideal response?
Congress passes a law that raises personal marginal tax rates
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The hypothesis suggesting that people combine the effects of past policy changes on economic variables with their own judgment about the future effects of current and future economic policy is referred to as the
A) passive expectations hypothesis. B) adaptive expectations hypothesis. C) rational expectations hypothesis. D) active expectations hypothesis.
In a perfectly competitive market the long-run demand and supply curves are Q = 12 - P and Q = 5P respectively. Producer surplus in this market equals
A) 0. B) 5. C) 10. D) It cannot be determined without more information.
If input cost rises significantly when production is increased, a firm's price elasticity of supply will tend to be low
Indicate whether the statement is true or false
A decrease in what variable will raise the quantity of goods and services supplied, and shift only the short run aggregate supply curve to the right?