In the basic Keynesian model, a tax increase:
A. increases short-run equilibrium output.
B. reduces potential output.
C. increases potential output.
D. reduces short-run equilibrium output.
Answer: D
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A fall in the real interest rate
A) results in a movement along the demand for loanable funds curve. B) shifts the demand for loanable funds curve rightward. C) shifts the demand for loanable funds curve leftward. D) has no effect on the demand for loanable funds curve
The Fed can change the money supply more quickly by using open market operations as compared to discount policy
Indicate whether the statement is true or false
The Department of Commerce sums the payments made to resources to arrive at GDP in the form of wages, rents, interest, profits, indirect taxes, and depreciation. This method of deriving GDP is called the:
a. opportunity cost approach. b. income approach. c. expenditure approach. d. monetarist approach.
The threat of rejection in market transactions:
A. leads to better products for consumers. B. leads to lower prices for consumers. C. leads to greater cooperation between buyers and sellers. D. does all of these.