In a closed economy, if taxes fall and consumption rises, then private saving must fall
a. True
b. False
Indicate whether the statement is true or false
False
You might also like to view...
If the multiplier effect did not exist, the aggregate demand curve would:
A. be horizontal. B. be flatter. C. be steeper. D. not exist.
What is the rationale behind a tradable emission allowance scheme?
A) to create a market for externalities: the scheme brings together buyers and sellers of marketable permits B) to discipline polluting firms by specifying the maximum amount of emissions allowed and giving them permits to pollute up to their allowance C) to raise revenue for the government through the sale of emission permits and at the same time set an emissions target D) to provide firms with the incentive to consider less costly alternatives to pollution reduction by making firms pay for the right to pollute beyond their specified allowance
Economies of scale can lead to an oligopolistic market structure because
A) if larger firms have lower costs, new small entrants will not be able to produce at the low costs achieved by the big established firms. B) if economies of scale are insignificant, only a few firms are able to produce at the low costs achieved by the big established firms. C) a few firms can force rivals to produce at low levels of output. D) a few firms can use high profits to keep out new entrants.
If the expenditure multiplier is 5, the slope of the aggregate expenditure (AE) curve is
A) 0.2. B) 0.5. C) 0.8. D) 0.7. E) 0.6.