Which of the following is most likely to lead to an economic contraction?
a. A decrease in the average price level
b. An increase in aggregate supply
c. A decrease in aggregate demand
d. A decrease in taxes
e. An increase in transaction demand for money
c
You might also like to view...
Identify the two losses of efficiency associated with the imposition of a tariff
What will be an ideal response?
Jim has estimated elasticity of demand for gasoline to be -0.7 in the short-run and -1.8 in the long run. A decrease in taxes on gasoline would: a. lower tax revenue in both the short and long run. b. raise tax revenue in both the short and long run
c. raise tax revenue in the short run but lower tax revenue in the long run. d. lower tax revenue in the short run but raise tax revenue in the long run.
One of the 20th century's worst episodes of inflation occurred in
a. the United States in the 1960s. b. Italy in the 1950s. c. Russia in the 1930s. d. Germany in the 1920s.
The Breton Woods System was an agreement that:
A. required each participating country to abolish all trade barriers. B. required each participating country to stay on the gold standard. C. standardized tariffs across all participating countries. D. required each participating country to peg their currency to the U.S. dollar.