If no fiscal policy changes are made, suppose the current aggregate demand curve will increase horizontally by $1,000 billion and cause inflation. If the marginal propensity to consume is 0.75, federal policymakers could follow Keynesian economics and restrain inflation by decreasing:
a. government spending by $250 billion.
b. taxes by $100 billion.
c. taxes by $1,000 billion.
d. government spending by $1,000 billion.
a
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The money demand curve will shift to the right if:
A. the nominal interest rate decreases. B. the price level increases. C. the nominal interest rate increases. D. the price level decreases.
The New York Stock Exchange handles only about 10 percent of all stock market transactions in the United States.
Answer the following statement true (T) or false (F)
When oligopolistic firms in an industry form a cartel, then it is most likely that
A) both industry output and prices will increase. B) both industry output and prices will decrease. C) industry output will increase while prices will decrease. D) industry output will decrease while prices will increase.
Welfare data show that in the United States
a. most welfare recipients receive benefits only for a short time b. welfare encourages young women to have children c. children brought up on welfare tend to remain on welfare as adults d. having poor parents does not increase the chances of a child's being on welfare as an adult e. children of poor parents have a 50 percent chance of being middle-income adults