The problem typically during a recession is not that there is too little money, but too little spending. If the problem was too little money, what would be its cause? If the problem was too little spending, what could be its cause?
What will be an ideal response?
Too little money would be caused by too small of a money supply by the Federal Reserve. Too little spending could be caused by a variety of reasons such as a decrease in consumption spending by households because they become pessimistic about the future, a decrease in investment spending by firms because they lower their estimates of the future profitability of new factories and machinery, or a decrease in U.S. exports because a major trading partner is in a recession.
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An increase in the price level causes
A) the money demand curve to shift to the left. B) a movement up along the money demand curve. C) a movement down along the money demand curve. D) the money demand curve to shift to the right.
For each of the following policy options the government can undertake to make the debt sustainable, explain the economic consequences and the resulting change to potential GDP: a. increasing seigniorage b. increasing taxes on wages c
increasing taxes on capital income d. decreasing expenditure on government capital goods e. decreasing expenditure on transfer programs such as Social Security, Medicare, and Medicaid
Explain how an economic populist regime usually progresses
What will be an ideal response?
If an increase in price leads to a decrease in total revenue,
A. demand is elastic. B. demand is inelastic. C. demand is unit elastic. D. there is not enough information to determine the elasticity of demand.