List the three possible ways the government can make adjustments, and the three possible ways the private sector can make adjustments, to an increase in the government's budget deficit
What will be an ideal response?
Government adjustments:
1. increase taxes
2. decrease expenditures on goods and services
3. decrease expenditures on transfer programs
Private-sector adjustments:
1. increase private savings
2. decrease investment
3. increase trade deficit through a combination of increased imports and decreased exports
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Refer to Figure 9.1. Assume the economy is initially at point A. The initial change from a shock that increases investment expenditure is best represented by which short-run equilibrium combination of price level and real GDP?
A) P2; Y2 B) P3; Y2 C) P1; Y2 D) P2; Y1
Mutual Fund Products Amplitude Investments offers a variety of mutual fund products for investors with different preferences. When they develop a new product for an under-served niche, they find out that their competitors will imitate them within a few months. Is investigating and developing new products going to be profitable for Amplitude?
Which of the following groups has experienced the greatest decrease in poverty rates since 1959?
a. the elderly b. children c. people 18 to 64 years old d. women e. none of the above (i.e., all of these groups have had higher poverty rates)
Critics of supply-side economics claim that it
a. favors the wealthy. b. increases federal debt. c. can be inflationary. d. does all of these.