Federal budget deficits generally grow during recessions because
a. both tax revenues and transfer payments decrease.
b. both tax revenues and transfer payments increase.
c. tax revenues decrease while transfer payments increase.
d. tax revenues increase while transfer payments decrease.
e. tax revenues decrease but transfer payments are unchanged.
C
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The "law of supply" refers to the fact that, all other things remaining the same, when the price of a good rises
A) the supply curve shifts leftward. B) the supply curve shifts rightward. C) there is a movement up along the supply curve to a larger quantity supplied. D) there is a movement down along the supply curve to a smaller quantity supplied.
Refer to Figure 7-1. The efficient equilibrium price is
A) $30. B) $25. C) $20. D) <$20.
With respect to Figure 7-2, an increase in government spending
a. shifts the IS curve to the left by G(? b/1 ? b). b. shifts the IS curve to the right by G(1 ? b/1 ? b). c. shifts the IS curve to the right by G(1/1 ? b). d. does not shift the IS curve.
If income changes, that leads to a movement along the money demand curve
a. True b. False