Refer to the information provided in Figure 24.5 below to answer the question(s) that follow.
Figure 24.5Refer to Figure 24.5. If the economy is in equilibrium and the government increases spending by $200 billion, equilibrium aggregate expenditures increase to $________ billion.
A. 1,800
B. 2,000
C. 2,400
D. 3,200
Answer: C
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If penalties are imposed on the sellers of illegal goods or services, then the equilibrium price ________ and the equilibrium quantity ________
A) rises; increases B) rises; decreases C) falls; increases D) falls; decreases
Which of the following increases money demand?
A) Disruptions in the banking system. B) The introduction of online banking. C) The wider availability of ATMs. D) The introduction of deposit insurance.
Social Security taxes are regressive because
A) they apply only to rich people. B) they are not applied to income beyond a certain amount. C) they are applied to welfare recipients. D) they are applied to retired people only.
Starting from an initial long-run equilibrium, under the rational expectations hypothesis, an anticipated shift to a more expansionary policy will increase
a. prices but not real output in the short run. b. real output but not prices in the short run. c. real output in the long run but not in the short run. d. real output in both the long run and the short run.