Contractionary fiscal policy would be most effective in decreasing inflation when
A. the marginal propensity to consume is low.
B. investment spending is insensitive to interest rates.
C. the economy has a high marginal tax rate.
D. investment spending is sensitive to interest rates.
Answer: B
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Which figure above shows the effect of a decrease in the number of pizza sellers?
A) Figure A B) Figure B C) Figure C D) Figure D E) Both Figure B and Figure C
The LM curve shows a series of income-interest rate combinations at which there is equilibrium in the
A) bond market. B) goods market. C) saving-investment market. D) money market.
Which of the following is a reason for the law of increasing opportunity cost? a. Some goods have limited alternative uses
b. Not all resources are equally adaptable to other uses. c. Prices of specific final goods increase as more of those goods are produced. d. Prices of specific final goods decrease as more of those goods are produced.
How has the development of the microchip and information technology contributed to increased productivity?
What will be an ideal response?