A tax rebate, which is expected to be offered in this and all future years, will
A) have a significant positive effect on consumption and aggregate demand, with aggregate demand growing by a multiple of the tax rebate.
B) increase aggregate supply and aggregate demand.
C) have a small positive effect on consumption and aggregate demand.
D) have no effect on consumption and aggregate demand.
A
You might also like to view...
Holding other factors constant, if the education and skills of the typical worker in an economy increases, then the real wages of workers will ________ and employment of workers will ________.
A. decrease; not change B. increase; increase C. decrease; increase D. increase; decrease
A _____ of representative democracy is it _____
a. downside; increases decision-making costs b. benefit; increases decision-making costs c. downside; reduces decision-making costs d. benefit; reduces decision-making costs
Suppose that gasoline prices increase dramatically this month. Lola commutes 100 miles to work each weekday. Over the next few months, Lola drives less on the weekends to try to save money. Within the year, she sells her home and purchases one only 10 miles from her place of employment. These examples illustrate the importance of
a. the availability of substitutes in determining the price elasticity of demand. b. a necessity versus a luxury in determining the price elasticity of demand. c. the definition of a market in determining the price elasticity of demand. d. the time horizon in determining the price elasticity of demand.
Refer to the diagram and assume the economy is initially at point b 1 . Point c 1 represents:
A. a stable position because reality and expectations are consistent.
B. a stable position because full employment and a constant annual inflation rate are
represented.
C. an unstable situation because government will undertake contractionary policies.
D. an unstable situation because nominal wage rates will increase.