Fiscal policy changes in government spending and taxes primarily target the aggregate supply curve.
Answer the following statement true (T) or false (F)
False
The federal government's tax and spending powers give it a great deal of influence over aggregate demand. The government can alter aggregate demand by purchasing more or fewer goods and services, raising or lowering taxes, and changing the level of income transfers. These tools primarily impact the aggregate demand, not the aggregate supply.
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An individual firm desiring to obey the letter of the law while avoiding the effects of regulation may use
a. predatory pricing. b. tit-for-tat strategies. c. creative response. d. collusion.
An increase in the price level in the economy leads to
A) a leftward shift in the demand for money curve. B) a rightward shift in the demand for money curve. C) a leftward movement along the demand for money curve. D) a rightward movement along the demand for money curve.
Complete crowding out occurs when an increase in government spending is completely offset by an equal increase in tax revenues
Indicate whether the statement is true or false
If people have a sudden decrease in confidence in the open economy of the U.S. and no longer want to invest there, the NCO:
A. increases, and the demand for loanable funds curve would shift left. B. decreases, and the demand for loanable funds curve would shift right. C. decreases, and the demand for loanable funds curve would shift left. D. increases, and the demand for loanable funds curve would shift right.