One of the primary functions of markets could be labeled
A. stimulation.
B. coordination.
C. planification.
D. decentralization.
Answer: B
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If the ________ curve is relatively more unstable than the ________ curve, an interest rate target is preferred
A) IS; IS B) IS; LM C) LM; IS D) LM; LM
Which of the following statements is correct for the long run?
a. Output is determined by the amount of capital, labor, and technology; the interest rate adjusts to balance the supply and demand for money; the price level adjusts to balance the supply and demand for loanable funds. b. Output is determined by the amount of capital, labor, and technology; the interest rate adjusts to balance the supply and demand for loanable funds; the price level adjusts to balance the supply and demand for money. c. Output is determined by the amount of capital, labor, and technology; the interest rate adjusts to balance the supply and demand for loanable funds; the price level is relatively slow to adjust. d. Output responds to the aggregate demand for goods and services; the interest rate adjusts to balance the supply and demand for loanable funds; the price level adjusts to balance the supply and demand for money.
Suppose that income taxes are reduced by $400 billion and households increase consumption by 80% of the resulting change in disposable income. Suppose also that the multiplier is 2. What is the marginal propensity to consume?
A) 0.2 B) 0.4 C) 0.8 D) 1.6
State income tax revenues are much less than sales tax revenues.
Answer the following statement true (T) or false (F)