In 1975, Congress passed a tax rebate to spur consumer spending. Consumers
A. spent the entire amount of the tax savings, boosting the economy, as planned.
B. did not spend any of the amount of the tax savings.
C. saved a substantial share of the tax savings and spent the rest.
D. saved a small portion of the tax savings, and spent the rest.
Answer: C
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Why does an increase in the price level tend to cause the consumption function to shift downward?
A. An increase in the price level decreases disposable income. B. An increase in the price level increases the demand for fixed money assets. C. An increase in the price level decreases the value of fixed money assets. D. An increase in the price level decreases saving and increases debt.
________ policy changes are made through the legislative process, while ________ policy changes are made by the Federal Open Market Committee.
A. monetary; fiscal B. monetary; international C. fiscal; monetary D. fiscal; international
For a monopolist to sell more units of output
A. the other competing firms must sell fewer units. B. demand must become more elastic. C. the price must be reduced. D. the price must be increased.
The free-rider problem occurs for:
A. private goods and public goods. B. private goods but not public goods. C. public goods but not private goods. D. neither public nor private goods.