The fictional country of Alpetra increases the income tax rate so that tax revenues increase by $70 million. Government spending also increases by $70 million and consumption falls by $10 million. If GDP remains the same and Alpetra is a closed economy, then investment
a. increases by $140 million.
b. increases by $70 million.
c. decreases by $60 million.
d. decreases by $80 million.
c
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When economists say the quantity demanded of a product has increased, they mean the:
a. demand curve has shifted to the left. b. demand curve has shifted to the right. c. price of the product has fallen, and consequently, consumers are buying more of it. d. price of the product has risen, and consequently, consumers are buying less of it.
The most effective and frequently used tool the Fed has at its disposal to change the economy's money supply is
a. open market operations b. the discount rate c. the legal reserve requirement d. the federal funds rate e. the margin requirement
The argument that purchases of minivans cause large families is an example of
a. omitted variables. b. normative statements. c. reverse causality. d. bias.
An individual supply curve is a(n) ______ as you move from left to right.
a. zig zag line b. horizontal line c. downward slope d. upward slope