The proposition that decreases in taxes that raise the government budget deficit has no effect on aggregate demand is called the
A) open-economy effect.
B) federalism effect.
C) Ricardian equivalence theorem.
D) interest-rate effect.
C
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Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
If the U.S. Surgeon General announces that increased wheat consumption could cause heightened anxiety levels among children and adults, what happens to the equilibrium price and quantity of shredded wheat?
A) The equilibrium price rises and the equilibrium quantity increases. B) The equilibrium price falls and the equilibrium quantity decreases. C) The equilibrium price rises and the equilibrium quantity decreases. D) The equilibrium price falls and the equilibrium quantity increases.
Production requires savings because production takes time, during which goods and services are not available from current production
Indicate whether the statement is true or false
Why is it that all of our wants cannot be satisfied?
A. because of shortages B. because we cannot seem to decide what we really want C. because limited resources mean all the goods we want cannot be obtained D. because other people try to change your mind about what you want