The U.S. president convinces Congress to fund a national program to land astronauts on Mars. This action, all other things held constant, increases government spending and ______.
a. decreases net exports
b. shifts the aggregate demand curve to the right
c. causes movement along the aggregate demand curve
d. increases consumer saving
b. shifts the aggregate demand curve to the right
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Compare and contrast the arguments favoring active versus passive policy making
What will be an ideal response?
If farmers operating in the competitive wheat industry are incurring losses, and are not kept in business with government subsidies, which of the following will result?
A) Price and quantity produced will both increase in the long run. B) Resources will be reallocated out of the wheat industry into more productive uses. C) Farmers will run economic losses indefinitely, if they are rational. D) The supply of wheat will fall to near zero and the U.S. will become dependent on foreign suppliers of food.
The recession of 2008-2009 was preceded by
a. a sharp decline in housing prices. b. large losses among financial institutions that owned mortgage-backed securities. c. rises in mortgage defaults and home foreclosures. d. all of the above