Refer to Figure 26-13. In the figure above, if the economy in Year 1 is at point A and is expected in Year 2 to be at point B, then the appropriate monetary policy by the Federal Reserve would be to
A) raise interest rates. B) lower income taxes.
C) lower interest rates. D) raise income taxes.
A
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f hot dogs are an inferior good, an increase in income will result in
What will be an ideal response?
Which of the following is not associated with the aggregate supply curve?
A. The profit effect. B. The interest rate effect. C. The cost effect. D. Factors of production.
The federal government granted 200 million acres of land to railroads. Which of the following statements presents accurate information about these land grants?
a. The railroads were required to return 1/3 of the profits from the sale of this land to the federal government. b. The alternate section provision allowed state governments to purchase portions of the land grants from the railroads at reduced prices. c. The system of land grant subsidies were difficult to eliminate because of public opposition. d. Congress required railroad companies that received land grants to transport mail, troops and government property at reduced rates.
An upward shift in the consumption function, other things being equal, could be caused by households:
a. becoming optimistic about the state of the economy. b. becoming pessimistic about the state of the economy. c. expecting future income and wealth to decline. d. None of these.