The following list contains items that are related to aggregate demand and/or aggregate supply.1)Government Spending 2)Consumer Expectations 3)Degree of Excess capacity 4)Personal Income Tax Rates 5)Productivity 6)National Income Abroad 7)Business Taxes 8)Domestic Resource Availability 9)Price of Imported Products 10)Profit Expectations on Investments Refer to the above list. A change in which factor is most likely to change both aggregate demand and aggregate supply?
A. 5
B. 3
C. 7
D. 9
Answer: C
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Which of the following statements is true of market prices in a perfectly competitive market?
A) Market prices are determined by the government. B) Market prices allow for efficient allocation of scarce resources. C) Market prices are not stable and fluctuate widely. D) Market prices do not act as incentives for buyers.
Define the following terms and explain their importance to the study of economics
a. public good b. externality c. irreversible decision d. moral hazard e. rent seeking
When the profits of a corporation are taxed and the dividends paid to stockholders are also taxed
A) the government is engaging in double taxation. B) the government is engaging in capital gains taxation. C) the government is engaging in regressive taxation. D) the government is engaging in progressive taxation.
If the marginal propensity to consume (MPC) is 0.9, the spending multiplier will be
A) 10. B) 1.11. C) 0.9. D) 0.1.