When the economy is in short-run equilibrium,
A) there are increases in inventory.
B) there are decreases in inventory.
C) total expenditures equal total production.
D) people want to buy more than will be produced.
C
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Expansionary fiscal policy to prevent real GDP from falling below potential real GDP would cause the inflation rate to be ________ and real GDP to be ________
A) higher; lower B) higher; higher C) lower; lower D) lower; higher
A friend tells you he is studying the incidence of the corporate income tax. What is the subject of his study?
A) how frequently corporations should be taxed B) how inflation affects the amount of tax revenue collected from firms C) how corporations can aid the government in collecting delinquent taxes D) how the burden of corporate taxation is distributed among stockholders, employees, and consumers
Suppose the market demand function in a certain market where Q is measured in thousands of units is Qd = 20 - 2.5P, and the market supply function is Qs = 2.5P - 7.5. How much deadweight loss would there be in this market if the quantity bought and sold was 6,000 units?
A. $0.03 B. $25 C. $500 D. $2,500
Suppose the intersection of the IS and LM curves is to the left of the FE line. A decrease in the price level would most likely eliminate a disequilibrium among the asset, labor, and goods markets by
A. shifting the IS curve down and to the left. B. shifting the LM curve down and to the right. C. shifting the IS curve up and to the right. D. shifting the FE curve to the left.