Ceteris paribus means allowing all things to change.
a. true
b. false
Ans: b. false
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The share of corporate tax in total federal revenues
A) has declined over the past few decades to a relatively low level. B) is larger than the other components of federal revenue. C) has grown significantly in each of the past 10 years. D) is the smallest of all the components of federal tax revenue.
If an economy is in a recession and the government opts for an expansionary fiscal policy to shift the AD curve closer to the potential output, a sound finance economist with a Classical view, who holds the Ricardian equivalence theorem to be practically true, would conclude that the AD curve:
A. does not shift since the higher government spending is offset by higher private consumption. B. does not shift since the higher government spending is offset by lower private consumption. C. shifts to the left due to higher government spending. D. shifts to the right due to higher government spending.
Refer to the accompanying figure. 
From the figure, we can infer that James' marginal rate of substitution is:
A. higher at point A than point B. B. the same at point A and point B. C. constant. D. higher at point B than point A.
Consumption spending includes spending on:
A. stocks, bonds, and other financial instruments. B. capital goods, residential housing, and changes in inventories. C. goods and services by federal, state, and local governments. D. durables, nondurables, and services.