In the short-run along the horizontal portion of the aggregate supply curve, an increase in the budget deficit and an expansionary monetary policy would:
A) increase the price level only.
B) increase both the price level and real income.
C) increase real income only.
D) none of the above.
C
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When a consumer is consuming at a point where his or her budget line is not as steep as his or her indifference curve, then he or she should
A) consume more of the good that is measured on the horizontal axis. B) consume less of the good that is measured on the horizontal axis. C) not change his or her behavior. D) consume none of the good that is measured on the horizontal axis.
Which of the following is not true of Lindahl prices for collective consumption goods?
a. Lindahl pricing might be useful in achieving political agreement on the proper amount of the public good to be produced. b. Lindahl prices are set so the marginal benefit they receive from the public good is equal to the marginal cost. c. Lindahl prices are difficult to calculate in practice. d. Lindahl prices are necessary for economic efficiency.
The middle class in China:
A. outnumbers the entire population of the United States. B. is almost equal in size to the entire population of the California. C. is about half the size of the population of the Germany. D. None of these is true.
When decentralized governmental units operate independently and compete with each other, governments will attract residents and expand their tax base when
A) they discontinue desired government services in order to keep taxes low. B) they increase their tax rates. C) they provide residents with desired services at an attractive tax cost. D) they provide residents with fewer government services.