Expansionary fiscal policy increases the level of aggregate demand by
a. increasing consumption by raising disposable income through increased government purchases through increased spending by the federal government.
b. increasing consumption by raising disposable income through raising after-tax profits through cuts in business taxes.
c. increasing consumption by raising disposable income through increased federal grants to state and local governments.
d. increasing consumption by raising disposable income through cuts in personal income taxes or payroll taxes.
d. increasing consumption by raising disposable income through cuts in personal income taxes or payroll taxes.
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The simultaneous export and import of airplanes by the United States is an example of
A) increasing returns to scale. B) imperfect competition. C) intraindustry trade. D) interindustry trade.
Refer to Figure 10.5. A shift from MP1 to MP2 will occur if
A) the Fed decreases its target for the short-term nominal interest rate. B) the term structure effect increases. C) the default-risk premium decreases. D) the expected inflation rate increases.
It appears that one out of ten individuals classified by the Census Bureau as a year round, full-time worker was actually employed part-time at least six weeks of the year
Indicate whether the statement is true or false
If a firm shuts down in the short run, then its:
A. economic loss will equal its variable costs. B. total revenue and total cost will fall to zero. C. economic loss will equal its fixed costs. D. profit will equal zero.