Refer to Figure 15-4. In the figure above, a movement from point A to point B would be caused by
A) an increase in the interest rate. B) a decrease in the price level.
C) a decrease in real GDP. D) an increase in the price level.
A
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The profits of a partnership are
A) taxed as personal income. B) subject to a corporate tax. C) taxed as capital gains indexed for inflation. D) exempt from taxation.
The side of the market that is more inelastic:
A. will bear more of the tax burden. B. will bear less of the tax burden. C. will share an equal amount of the tax burden. D. determines whether to shoulder the majority of the tax burden or pass it on.
Within the framework of the Keynesian model, if aggregate expenditures exceed aggregate output, then:
a. the inventories of firms would decline, and the firms would expand output in order to restore their inventories to desired levels. b. the inventories of firms would increase, and the firms would reduce output until inventories were cut back to the desired level. c. the current level of income would persist in the future. d. firms would reduce their investment, and the economy would fall into a recession.
In the 1990s, the United States eliminated its budget deficit and expanded the money supply. This should have led to
A. lower real interest rates and a depreciation of the dollar. B. lower real interest rates and an appreciation of the dollar. C. higher real interest rates and a depreciation of the dollar. D. higher real interest rates and an appreciation of the dollar.