Which of the following changes shifts the SRAS curve down?
A. A decrease in firms' costs
B. A decrease in government purchases
C. An increase in the labor force
D. An increase in the money supply
Answer: A
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One tenet of classical economics is that
A) the role of the government should be limited, since the market will always be self-correcting. B) the government should set a minimum wage slightly above the natural market equilibrium rate. C) the government should intervene whenever necessary to avoid any unemployment. D) wages and prices are "sticky downward."
Local property tax policy generally has a small effect on the property tax base.
A. True B. False C. Uncertain
If government spending in a country declines by $10 billion and, at the same time, taxes increase by an equal amount, what is the total effect in the economy?
a. Equilibrium real GDP increases b. Equilibrium real GDP increases by $20 billion c. Equilibrium real GDP is unchanged d. Equilibrium real GDP decreases by more than $10 billion and less than $20 billion e. Equilibrium real GDP decreases by more than $20 billion
When there is a kinked demand curve, an oligopolist's competitors will match price increases
Indicate whether the statement is true or false