Are changes in government purchases, ceteris paribus, more likely to be associated with a shift in the aggregate demand (AD) curve or a movement along the AD curve in the United States? Explain your reasoning.
What will be an ideal response?
Movements along the AD curve occur as a result of changes in the general price level. Price level changes can significantly impact consumption, investment, and net exports. However, government spending appears much less sensitive to overall price changes than the other components of AD. Government spending is more dependent on budgetary and political considerations. Thus, a change in government spending is more likely to be associated with a shift in the AD curve. Government purchases are another part of total spending and therefore must have an impact on aggregate demand. An increase in government purchases, other things being equal, shifts the aggregate demand curve to the right, while a reduction shifts aggregate demand to the left.
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Answer the following statement(s) true (T) or false (F)
1. The Maximum Contaminant Level (MCL) is to be set as close to the Maximum Contaminant Level Goal (MCLG) as possible. 2. An established reference dose (RfD) is defined as the amount of a contaminant to which people can be exposed over a 24-hour period without harm. 3. U.S. primary drinking water regulations are performance-based standards. 4. Secondary maximum contaminant levels (SMCLs) are enforceable drinking water standards that are set to protect public welfare. 5. A drinking water standard based on benefit-cost analysis would be set at the point where the TSB is maximized.
Suppose that investment is very responsive to interest rates, so that even a small change in interest rates has a substantial effect on investment. In this case, expansionary monetary policy that results in a modest drop in interest rates will:
A. increase output only slightly. B. not increase output. C. decrease output sharply. D. increase output significantly.
"In the two-good, two-country model with increasing costs, the output quantities are determined only by considering society's preferences as illustrated with community indifference curves. However, in the same model, it is possible to determine the post-trade consumption point in each country without indifference curves." Are these statements true, false, or partly true and partly false? Justify your answer.
What will be an ideal response?
All of the following are positive statements EXCEPT
A) the President of the United States in 2016 was Barack Obama. B) California is in the United States. C) migratory birds fly south for the winter. D) a dog is man's best friend.