Faced with a large federal budget deficit, the government decides to decrease expenditures and tax revenues by the same amount. This action will affect output and interest rates in which of the following ways?
A) Increase/Increase
B) Increase/Decrease
C) no change/Decrease
D) Decrease/Increase
E) Decrease/Decrease
Answer: E) Decrease/Decrease
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Three hundred firms supply the market for paint. For fifty of the firms, their short-run average variable costs are minimized at $10 and short-run total costs are minimized at $15
For the remaining firms, the short-run average variable costs and short-run average total costs are minimized at $20 and $25, respectively. If each firm has a U-shaped marginal cost curve then the short-run market supply curve is A) U-shaped too B) kinked at $10 C) kinked at $15 D) kinked at $20 E) kinked at $25
When economic profits are negative, accounting profits could be:
A. negative. B. zero. C. positive. D. All of these are possible.
A sharp rise in household wealth will cause:
a. Aggregate demand to fall b. Aggregate demand to rise c. Aggregate supply to fall d. Aggregate supply to rise
If the government imposes a per-unit tax on sales of an industry's product, then we would expect
A) the supply curve in that industry would shift to the left. B) the supply curve in that industry would shift to the right. C) the demand curve for that industry would shift to the right. D) the demand curve for that industry would shift to the left.