If the government increases spending but does not raise taxes
A) aggregate demand will increase without any effect on the price level.
B) borrowing by the government will take place.
C) the government will have to sell some assets, such as oil and national parks.
D) the government will have to either lower expenditures or raise taxes the next year.
B
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To be as well off as possible, a nation should produce
a. only those goods that its populace desires. b. the good within its productive capabilities that commands the highest price in the world market. c. the good that requires the fewest resources to produce. d. whatever good it can produce at a cost lower than that incurred by other nations.
Suppose the Fed increases the money supply. As a result of this, people go out and spend more money on consumer goods, increasing aggregate spending. This is known as a(n)
A) indirect effect of monetary policy. B) direct effect of monetary policy. C) indirect effect of fiscal policy. D) direct effect of fiscal policy.
What is the Phillips curve? What is the difference between the original Phillips curve and the "modern" view of the Phillips curve? What problems caused the abandonment of the ideas behind the original Phillips curve?
Efficiency wages tend to:
A. reduce costs in the short run but increase them in the long run. B. raise costs in both the long run and the short run. C. reduce costs in both the long run and the short run. D. increase costs in the short run but reduce them in the long run.