Fiscal policy involves ________
A) taxes and government spending
B) setting interest rates
C) controlling the amount of money in the economy
D) all of the above
E) none of the above
A
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Starting from long-run equilibrium, an increase in autonomous consumption results in ________ output in the short run and ________ output in the long run.
A. higher; higher B. higher; potential C. lower; higher D. lower; potential
The most significant form of revenue in developed countries is the income tax
a. True b. False
The rate at which aggregate supply changes to restore equilibrium at potential output depends crucially on:
a. how quickly planned investment spending adjusts to changes in population growth b. how quickly planned consumption spending adjusts to changes in the price level and nominal wages. c. how quickly technology changes to increase aggregate supply. d. whether the economy is experiencing a recessionary gap or an expansionary gap. e. how quickly real wages adjust to restore full employment in the labor market.
Within the production possibilities frontier (PPF) framework, choice is depicted by the
A) PPF itself. B) PPF being bowed outward. C) need to select among the points making up the PPF. D) straight-line PPF.