In the midst of the Great Depression in 1932, Congress and the Hoover administration increased tax rates substantially. According to the Keynesian view, this tax increase was
a. inappropriate because it would depress economic activity and lead to further increases in unemployment.
b. appropriate because it would lead to a significant increase in the money supply and, thereby, increase employment.
c. inappropriate because it would decrease the money supply and, thereby, prolong the Depression.
d. appropriate because it would stimulate economic activity and help end the Depression.
A
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Which of the following statements about the marginal rate of substitution is NOT correct?
A) It measures the number of units of the good on the horizontal axis that a consumer must be compensated with to give up a unit of the good on the vertical axis, while remaining on the same indifference curve. B) It is measured by the slope of the indifference curve. C) It decreases in value when moving downward along a typical-shaped indifference curve. D) It is constant for goods that are perfect substitutes.
Use the dynamic aggregate demand and aggregate supply model and start with Year 1 in long-run macroeconomic equilibrium
For Year 2, graph aggregate demand, long-run aggregate supply, and short-run aggregate supply such that the condition of the economy will induce the Federal Reserve to conduct a contractionary monetary policy. Briefly explain the condition of the economy and what the Federal Reserve is attempting to do.
The Delphi method is a
A) smoothing technique in forecasting. B) consensual forecast based on expert opinions. C) compound growth approach to forecasting. D) naïve forecasting approach.
Reduced U.S. tastes for European goods would ____ the supply of euros and ____ the demand for euros. a. decrease; increase
b. not change; increase. c. increase; increase. d. not change; decrease.