Which of the following will not cause consumption, and as a result, aggregate demand, to increase?
a. an optimistic business forecast of future income growth
b. a tax cut
c. an increase in consumer confidence
d. a tax increase
d
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Country A can produce 1 cello by giving up the production of 5 guitars. Country B can produce 1 guitar by giving up the production of 4 cellos. In which good does country A have a comparative advantage?
A) guitars B) cellos C) both goods D) neither good
The term Ceteris paribus means that:
a. everything is changing. b. all other things remain unchanged. c. no one knows which variables will change and which will remain constant. d. the basic principle of economics do not apply to the case being considered.
If Britain, at the point where it is currently producing, must give up the production of 75 hats to produce 25 additional sweaters, the opportunity cost of producing 4 sweaters is _______ hats.
A) 4 B) 12 C) 71 D) 79
Suppose that consumers expect that the price of a product will increase in the future. The result is that:
A. the current demand for the product increases. B. the current demand for the product decreases. C. the current supply of the product increases. D. the current supply of the product decreases.