In November, 2012, U.S. lawmakers were faced with a "fiscal cliff:" if they did not agree on how to reduce the federal deficit, automatic tax increases and drastic cuts in government spending would take effect. What would happen if the fiscal cliff occurred?
A) The aggregate demand curve shifts rightward, the price level rises and real GDP increases.
B) The aggregate demand curve shifts leftward, the price level falls and real GDP decreases.
C) The short run aggregate supply curve shift leftward, the price level rises and real GDP decreases.
D) The short run aggregate supply curve shifts rightward, the price level falls and real GDP increases.
B) the aggregate demand curve shifts leftward, the price level falls and real GDP decreases
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Spending on an education is considered an investment because it involves a sacrifice of current income for higher expected future income.
Answer the following statement true (T) or false (F)
Fred's income has just risen from $940 per week to $1,060 per week. As a result, he decides to purchase 9 percent more steak per week. The income elasticity of Fred's demand for steak is
A) 0.75. B) 0.90. C) 1.00. D) 1.33.
Increasing the amount of consumption spending and reducing the amount of savings ________ investment expenditures, and ________ long-run economic growth in the economy
A) decreases; increases B) increases; decreases C) increases; increases D) decreases; decreases
Refer to the graph below. A minimum wage in this labor market would
a. cause some layoffs as the quantity demanded for workers falls.
b. create some unemployment as a result of an increase in the quantity supplied of labor looking for a job.
c. create a surplus of labor in this market.
d. All of the above.