Suppose aggregate demand fell. In order to stabilize the economy, the government might
a. decrease the money supply.
b. decrease government expenditures.
c. decrease taxes.
d. do nothing.
c
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In the market for bank reserves, the supply of reserves is
A) an upward sloping curve. B) a downward sloping curve. C) a vertical curve. D) none of the above.
Which of the following could increase the demand for dollars in the foreign exchange market?
a. a higher inflation rate in foreign countries b. higher interest rates in foreign countries c. higher prices in the United States d. a depreciation of the dollar e. an appreciation of other currencies
Which of the following is a financial contract in which a firm agrees to repay the amount borrowed plus interest?
a. Corporate bond b. Certificate of deposit c. Municipal bond d. Stock
One way to solve the free-rider problem is:
A. tax everyone an equal amount for the good. B. have the government provide the good at a certain cost. C. make the good or service more excludable. D. tax those who truly value the good.