Between two indifference curves, the one on the right indicates:
A) the same level of utility as the one on the left.
B) the same bundle of goods as the one on the left.
C) a higher level of utility than the one on the left.
D) a lower level of consumer income than the one on the left.
C
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Which of the following statements best describes the central bank response to inflation?
a. If inflation threatens, the central bank uses expansionary monetary policy to reduce the supply of money, reduce the quantity of loans, raise interest rates, and shift aggregate demand to the right. b. If inflation threatens, the central bank uses expansionary monetary policy to reduce the supply of money, reduce the quantity of loans, raise interest rates, and shift aggregate demand to the left. c. If inflation threatens, the central bank uses contractionary monetary policy to reduce the supply of money, reduce the quantity of loans, raise interest rates, and shift aggregate demand to the right. d. If inflation threatens, the central bank uses contractionary monetary policy to reduce the supply of money, reduce the quantity of loans, raise interest rates, and shift aggregate demand to the left.
When you compare the effects of government spending on aggregate demand with the effects of taxes on aggregate demand, the effects of government spending are
a. smaller. b. larger. c. the same. d. impossible to predict.
Refer to the above figure. Which panel is consistent with the Laffer curve?
A. Panel A B. Panel B C. Panel C D. Panel D
If the government runs a deficit, then the government debt increases.
Answer the following statement true (T) or false (F)