The government increases both its expenditures and taxes by $400 billion. There is no crowding out and no accelerator effect. Aggregate demand shifts by $400 billion. Which of the following is consistent with how far aggregate demand shifts?
a. MPC = 1/2, and the effects of the increase in taxes is 1/2 as strong as the change in government expenditures.
b. MPC = 2/3, and the effects of the increase in taxes is 2/3 as strong as the change in government expenditures
c. MPC = 3/4, and the effects of the increase in taxes is 3/4 as strong as the change in government expenditures
d. All of the above are correct.
d
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A) domestic outsourcing. B) vertical integration. C) international outsourcing. D) insourcing.
Currency speculators are traders who seek to profit from a(n):
a. shift in global demand and supply patterns. b. increase in the price of oil. c. sudden shift in interest rates. d. exchange rate change by selling the currency expected to appreciate and buying the currency expected to depreciate. e. exchange rate change by selling the currency expected to depreciate and buying the currency expected to appreciate.
The balance of payments accounts contain information about the
A. purchases of U.S. financial assets by foreigners. B. purchases of foreign financial assets by U.S. citizens. C. levels of U.S. exports and imports. D. All of the choices/statements are true.
Refer to the graph below. Suppose that its shows the S and D graphs in a market where production entails a significant amount of pollution. In this case, the government should use its coercive power to make:
A. The supply curve shift to the left
B. The supply curve shift to the right
C. The demand curve shift to the left
D. The demand curve shift to the right