President Trump has proposed lowering income taxes for individuals. Explain how lower income taxes affect the aggregate demand curve
What will be an ideal response?
Lowering the income tax increases the amount of disposable income available to households. Higher disposable income increases consumption at every price level. The result is a shift in the aggregate demand curve to the right.
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In the aggregate expenditure (AE) model, when real GDP exceeds aggregate planned expenditure, actual inventories ________ planned inventories and real GDP ________
A) are less than; decreases B) exceed; increases C) exceed; does not change D) are less than; increases E) exceed; decreases
Regional Federal Reserve Banks
A) are located in each of the 50 states. B) are run by the governors of the states in which they are located. C) provide general banking services to the public. D) None of the above answers is correct.
When production is characterized by persistently declining long-run average costs as output increases
A) the costs of production are greater when competition exists than when a single firm produces a good. B) it is impossible for two firms to compete in the market. C) the costs are lower if a single firm exists, and even if the firm is unregulated, price will still be lower with a single firm. D) there is no need for the government to limit competition by licensing requirements.
Which of the following is most likely to happen to open-access wildlife resources?
a. They will be used efficiently. b. They will not be used at all. c. It will be unprofitable to use them. d. They will be used but will generate no profit. e. They will become extinct.