A disadvantage of using tax financing to fund an increase in government spending, which is designed to lower unemployment, is that
a. the taxes may absorb funds that would otherwise be used for consumption or investment.
b. the taxes are unlikely to absorb funds that would otherwise be used for consumption or investment.
c. a tax increase is likely to fuel inflation.
d. the taxes may absorb funds that would otherwise be used to purchase imports.
c. a tax increase is likely to fuel inflation.
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The consumption function shows an indirect relationship between consumer spending and disposable income
a. True b. False Indicate whether the statement is true or false
Purchasing-power parity describes the forces that determine
a. prices in the short run. b. prices in the long run. c. exchange rates in the short run. d. exchange rates in the long run.
For supply-side inflation to occur in the long run
A. the long-run aggregate supply curve has to shift to the left. B. the aggregate demand curve has to shift to the left. C. the long-run aggregate supply curve has to shift to the right. D. the aggregate demand curve has to shift to the right.
The creation of the Federal Reserve in 1913:
A. guaranteed the Federal Reserve would always act as lender of last resort. B. provided the opportunity for lender of last resort but not the guarantee that it would be used. C. eliminated bank panics in the U.S. D. was in response to the Great Depression in the U.S.