Use the following graph to answer the next question.
What combination would most likely cause a shift from AD1 to AD3?
A. A decrease in taxes and a decrease in government purchases
B. An increase in taxes and a decrease in government purchases
C. A decrease in taxes and an increase in government purchases
D. An increase in taxes and an increase in government purchases
Answer: B
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Which of the following statements is true?
A) An individual's current spending increases when he lends money. B) An individual's current spending decreases when he borrows money. C) An economic agent lends to move his spending from the future to the present. D) An economic agent lends to earn a return.
Firms can have a high degree of monopoly power and not be a perfect monopoly if they:
A. are the single producer of a product. B. control 80 to 90 percent of the market. C. have only a small number of competitors. D. intimidate the other businesses in the market.
Which of the following demonstrates marginal thinking? a. Deciding to never eat meat
b. Deciding to spend one more hour studying economics tonight because you think the improvement on your next text will be large enough to make it worthwhile to you. c. Deciding to go to a Sociology class that you usually skip because there is a guest lecturer you are really interested in hearing that day. d. Both b. and c. demonstrate marginal thinking.
A tax multiplier equal to ?4.30 would imply that a $100 tax increase would lead to a:
A. $430 decline in real GDP. B. $430 increase in real GDP. C. 4.3 percent increase in real GDP. D. 4.3 percent decrease in real GDP.