Figure 11-1
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In Figure 11-1, the slope of the expenditures schedule is 0.75, and the government wishes to achieve full employment. It should
A. cut spending by 1,000.
B. increase spending by 1,000.
C. cut taxes by 1,000.
D. increase spending by 250.
E. cut taxes by 250.
Answer: D
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If demand for a product is perfectly inelastic, a change in price will not change total revenue
Indicate whether the statement is true or false
Refer to Figure 5-16. Suppose Amit and Bree know each other's preferences so that it is not possible for one to deceive the other
Which of the following statements best describes the circumstances under which the optimal quantity of street lights could be achieved? A) The optimal quantity will be installed only if Bree pays for the entire installation cost. B) The optimal quantity will be installed only if the two parties agree to pay according to their willingness to pay as indicated by their respective demand curves. C) Because there are only two consumers, it is likely that private bargaining will result in the optimal quantity being installed. D) The optimal quantity will be installed only if the two parties split the cost of installation equally.
Which one of the following will shift the investment demand curve leftward?
a. A technological breakthrough. b. Lower tax rates. c. Optimistic business expectations. d. A lower rate of capacity utilization. e. None of these.
In the 1980s, the U.S. current account deficit was financed by:
a. large outflows of domestic capital to other countries. b. large inflows of capital from private foreign investment in the United States. c. loans made by U.S. residents to the government. d. large inflows of foreign government capital. e. the Tax Reform Act of 1986, which increased income taxes for the wealthy.