According to the Keynesian approach, an increase in taxes
A. will reduce consumption by an amount less than the change in taxes.
B. will reduce consumption exactly by the amount of the taxes.
C. will increase consumption, as the government will spend the extra tax revenue and that increases consumption.
D. will not impact consumption, as most consumption is autonomous.
Answer: A
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Unlike social insurance taxes, income taxes are paid on wages only
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Macroeconomic forces are a powerful explanation for changes in the size of the poverty population
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Which of the following about demand is true?
a. The height of the demand curve for a product at a given quantity represents the marginal value derived by the consumption of that unit. b. The height of the demand curve for a product at a given quantity reflects the total value consumers derive from all units of the good consumed. c. The total area above the demand curve for a product is equal to consumer surplus. d. At every quantity, the height of the demand curve for a product represents the cost of producing that unit.
The aggregate supply curve illustrates that the
A) higher the price level, the greater the quantity of real GDP supplied.
B) higher the price level, the smaller the quantity of real GDP supplied.
C) aggregate demand curve is not needed to determine the aggregate price level.
D) price level does not affect the quantity of real GDP supplied.
E) amount of potential GDP increases when the price level rises.