Other things being equal, a decline in business taxes will cause investment to:
a. remain unchanged
b. increase
c. decrease
d. to equal consumption
b. increase
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Explain the process by which the banking system creates money
What will be an ideal response?
A rise in government expenditure __________ the natural rate of interest
A) lowers B) raises C) has no effect on D) has an uncertain effect on
Amanda is from Vermont and visiting California for the first time. At home, Amanda always goes jogging early in the morning because it's hottest in the early afternoon. Not knowing what to expect of the weather in California, she decides to go jogging in the early morning during her visit. This decision is an example of:
A. loss aversion. B. status quo bias. C. a heuristic. D. positive framing.
Which of the following statements is true about Say's law?
a. It states that supply creates its own demand. b. It states that demand creates its own supply. c. It states that total output will always exceed total spending. d. It states that consumption spending is the most volatile component of aggregate expenditures. e. It is a major proposition of the Keynesian model.