If taxes are cut, there is
A) an increase in aggregate demand and the AD curve shifts rightward.
B) a decrease in aggregate demand and the AD curve shifts leftward.
C) an increase in the quantity of real GDP demanded and a movement up along the AD curve.
D) a decrease in the quantity of real GDP demanded and a movement down along the AD curve.
E) no change in aggregate demand, only a change in potential GDP.
A
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Which of the following is a price floor?
A. a freeze on upward-moving gasoline prices B. rent controls C. minimum wage rates D. college tuition caps
________ is an example of a public good.
A. A Starbucks grande latté B. Chemotherapy C. An American Airlines jet D. Police protection
The land of Mordor increases its capital stock. As a result, the long-run aggregate supply curve shifts ________ and so does the ________ curve
A) rightward; aggregate demand B) leftward; aggregate demand C) rightward; short-run aggregate supply D) leftward; short-run aggregate supply
. We saw in Chapter 18 that many central banks have turned to a policy framework of inflation targeting. Discuss if this would be effective in a country experiencing deflation.
What will be an ideal response?