A personal tax cut of $50 billion will affect income differently than an increase in government spending by $50 billion because:
A. The increase in government spending will produce a political business cycle
B. The increase in government spending is less expansionary than the increase in taxes
C. Households may save part of the additional income from the tax cut
D. Households may consume more than the additional income from the tax cut
C. Households may save part of the additional income from the tax cut
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Refer to Figure 9-3. What is the value of revenue to foreign producers who are granted permission to sell in the U.S. market when there is a quota?
A) $12 million B) $17.25 million C) $20 million D) $44 million
If the seller of a used car offers a limited warranty, the warranty is an example of a(n)
a. signal. b. screen. c. efficiency wage. d. agent.
An increase in the supply of bonds leads to an increase in aggregate demand.
a. true b. false
Which of the following policies would be most likely to reduce the rate of inflation?
A. sale of government bonds by the Federal Reserve B. a reduction in the discount rate C. an increase in the size of the federal budget deficit D. a reduction in the required reserves imposed on the banking system