Starting from short-run equilibrium, the following occurs: personal income taxes are cut, business taxes are cut, and labor productivity rises. What is the effect on the price level and Real GDP in the short run?
A) Real GDP rises and the price level necessarily falls.
B) Real GDP rises and the price level necessarily rises.
C) Real GDP falls and the price level necessarily remains the same.
D) Real GDP rises and the effect on the price level cannot be determined.
E) Real GDP rises and the price level necessarily remains the same.
D
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What policies would you recommend to the U.S. government to lower the balance of trade deficit and decrease net capital inflows?
What will be an ideal response?
Suppose you have $200 with which you can buy shares of stock from two companies: ABC Hot Chocolate Company and XYZ Lemonade. Each company's stock currently sells for $100 per share. If the temperature next year is lower than average, the stock price for ABC will increase by $20, and the stock price for XYZ will not change. If the temperature next year is higher than average, the stock price for XYZ will increase by $20, and the stock price for ABC will not change. There is a 50% chance that it will be colder than average next year, and a 25% chance that it will be warmer than average. If you purchase two shares of ABC stock and no shares of XYZ stock, your expected gain will be ________.
A. $0 B. $20 C. $40 D. $30
Which of the following transactions would be recorded as a credit in the U.S. current account?
A. a Japanese bank's purchase of IBM stock B. a Japanese consumer's purchase of an Apple computer C. an American tourist's payment to a Japanese hotel D. an American consumer's purchase of a Toshiba VCR
If the market price of a basketball is $35 and the full cost of producing it is $20, then a basketball producing firm gets producer surplus of
A. 1 basketball. B. $35. C. $20. D. $15.