Use the following diagram to answer the next question.
All else equal, which of the following events would cause a shift from (I + G + NX)1 to (I + G + NX)2?
A. Government spending on national defense was reduced by $1 billion.
B. The government cut taxes by $100,000 million.
C. Russia purchased $75 million of wheat from domestic farmers.
D. Businesses reduce their inventories by $20 million.
Answer: C
You might also like to view...
An alternative approach is to raise taxes on gasoline and other fuels. What is the economic intuition of this policy?
To promote cleaner air, the federal government in the United States enacted tax incentives for purchasing new electric vehicles or clean-fuel vehicles. These were scheduled to be phased out over time.
Reserves of a bank equal its
A) deposits with the Federal Reserve. B) vault cash plus deposits of its customers. C) vault cash plus deposits with the Federal Reserve. D) vault cash.
The model of monopolistic competition assumes that
a. there are only a few sellers b. there are significant barriers to exit c. each firm charges the same price for its output d. the buyers are price setters e. firms are strategically independent
Can a one-time increase in the supply of money cause one-shot inflation?
A) Yes, because it shifts the aggregate demand curve rightward. B) No, because it cannot shift the aggregate demand curve rightward. C) Yes, because it shifts the aggregate demand curve leftward. D) Yes, because it shifts the aggregate supply curve rightward.