The initial impact of an increase in an investment tax credit is to shift
a. aggregate demand right.
b. aggregate demand left.
c. aggregate supply right.
d. aggregate supply left.
a
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Attempts to shield the poor from the worst results of adjustment programs involve
a. expenditure-switching policy b. absorption c. a social safety net d. conditionality e. all of the above
A budget surplus occurs if government spending:
A. Equals tax revenues. B. Is greater than tax revenues. C. Is less than tax revenues. D. Causes tax revenues to increase.
The essential feature of the market mechanism is the price signal.
Answer the following statement true (T) or false (F)
Suppose that when the price per ream of recycled printer paper rises from $4 to $4.50, the quantity demanded falls from 800 to 600 reams per day. Using the midpoint formula, what is the price elasticity of demand (in absolute value) over this range?
A) 0.003 B) 0.41 C) 2.43 D) 4