The goals of fiscal policy are (1) _______; (2) ________; and (3) ________.
Fill in the blank(s) with the appropriate word(s).
price stability; relatively full employment; a satisfactory rate of economic growth
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Exhibit 5-6 Demand curve for concert tickets
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In Exhibit 5-6, if promoters lower their ticket price from $30 to $20, then:
A. ticket sales will increase but total revenue will decrease because demand is inelastic between $30 and $20. B. both ticket sales and total revenue will increase because demand is inelastic between $30 and $20. C. ticket sales will decrease but total revenue will increase because demand is elastic between $30 and $20. D. both ticket sales and total revenue will increase because demand is elastic between $30 and $20.
If the FOMC orders the sale of T-bills in the open market, then bank reserves are
A. decreased, but the money supply will remain unchanged. B. decreased, and a multiple contraction of the money supply will occur. C. increased, but the money supply will remain unchanged. D. increased, and a multiple expansion of the money supply will occur.
What does the coefficient a in the new classical expression for short-run aggregate supply represent?
A) the full employment level of output B) the price level in the previous period C) how much output responds when the actual price level differs from the expected price level D) how much the price level responds when the actual level of output differs from the full employment level of output
The substitution effect of a change in the price of bananas refers to the way in which a change in the
a. price of a substitute affects the demand for bananas b. price of bananas affects the ability to buy them c. relative price of bananas changes demand for them d. relative price of bananas changes the quantity demanded of bananas e. price of a substitute affects the quantity demanded of bananas