Which of the following are effects of an increase in government spending financed by a tax increase?
a. the tax increase reduces consumption; the change in the interest rate reduces residential construction
b. the tax increase reduces consumption; the change in the interest rate raises residential construction
c. the tax increase raises consumption; the change in the interest rate reduces residential construction
d. the tax increase raises consumption; the change in the interest rate reduces residential construction
a
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Self-interest relates to
A) only monetary objectives. B) both monetary and nonmonetary objectives. C) the ceteris paribus assumption. D) normative economic analysis and not positive economic analysis.
Whenever the general level of prices rises because of continual increases in aggregate demand, we say that the economy is experiencing
A) supply-side inflation. B) monetary stagflation. C) demand-side inflation. D) aggregate supply shock.
Under perfect competition, existing firms leave the market in the long run if the price falls below total fixed cost
a. True b. False Indicate whether the statement is true or false
A profit-maximizing firm in a competitive market will earn zero accounting profits in the long run
a. True b. False Indicate whether the statement is true or false