A tax cut ________ disposable income, ________ consumption expenditure, and shifts the IS curve to the ________, everything else held constant
A) increases; increases; right
B) increases; decreases; right
C) decreases; increases; left
D) decreases; decreases; left
A
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What is meant by diminishing marginal benefits? Are you likely to experience diminishing marginal benefits for goods that you like a lot? Are there exceptions to the general rule of diminishing marginal benefits? (Hint: think about batteries that you
would use in a flashlight that requires two batteries.) Explain your answer.
Suppose the market clearing price is $20 and the price ceiling is $15. The price that prevails in the market will be
A) $20. B) $15. C) less than $15. D) $0.
The largest source of income for most people is:
A. income from interest in savings accounts. B. wages earned at work. C. rental income from properties that they own. D. investment income.
The discount window is a:
A. lending facility that allows any bank to borrow reserves from the Fed. B. lending facility that banks can use at specified times to borrow reserves needed to meet reserve requirements. C. term used for large banking transactions that are associated with lower risk, and therefore qualify for lower interest rates. D. term used for when large banks offer a lower interest rate for attracting more borrowers.