For this question, assume that the Fed is expected to respond to any event by keeping the interest rate constant (i.e., equal to its initial level). An unexpected tax cut will cause
A) stock prices to fall.
B) stock prices to rise.
C) no change in stock prices.
D) an ambiguous effect on stock prices.
B
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The United States switched from being a ________ to being a ________ in the early 1980s, when it started to run large current account ________
A) net lender; net borrower; deficits B) net borrower; net lender; deficits C) net borrower; net lender; surpluses D) debtor nation; creditor nation; deficits E) net lender; net borrower; surpluses
The marginal cost to a student of missing a class meeting in Introductory Economics increases when
A) textbook prices increase. B) tuition rates increase. C) valuable information is communicated in the class meetings. D) any of the above occurs.
The above figure represents a perfectly competitive industry that is taken over by a single firm and operated as a monopoly
a) What was the competitive price and quantity? b) What is the monopoly price and quantity? c) What area represents consumer surplus under perfect competition? d) What area represents consumer surplus under monopoly? e) What area represents the deadweight loss of monopoly?
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.