Exhibit 3-4 Supply curves
In Exhibit 3-4, a shift in the supply curve from S1 to S2 represents a(n):
A. decrease in supply.
B. decrease in the quantity supplied.
C. increase in supply.
D. increase in the quantity supplied.
Answer: C
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Which of the following statements is positive?
A. Higher taxes are needed to support education. B. Large budget surpluses should be avoided. C. A tax cut that benefits high-income households is acceptable. D. Tax increases tend to discourage saving.
According to Keynes' theory of money demand, a low interest rate increases the likelihood of a capital ________ and ______ the interest elasticity of money demand
a. gain on bonds; reduces. b. gain on money; increases. c. loss on bonds; reduces. d. loss on money; increases. e. none of the above.
If the price level rises, the aggregate expenditure curve shifts downward and the economy moves up the aggregate demand curve
Indicate whether the statement is true or false
According to the theory of rational ignorance, which of the following prevents people from voting?
a. If they feel their vote will not matter in the election b. If they will be required to show voter identification c. If they believe that politicians are unethical d. If they do not belong to a specific political party