Which of the following is an appropriate discretionary fiscal policy if equilibrium real GDP falls below potential real GDP?
A) an increase in the supply of money B) an increase in individual income taxes
C) a decrease in transfer payments D) an increase in government purchases
D
You might also like to view...
Suppose an excise tax of $1 is imposed on every case of beer sold and sellers are responsible for paying this tax. How would the imposition of the tax be illustrated in a graph?
A) The supply curve for cases of beer would shift to the right by $1. B) The supply curve for cases of beer would shift to the left by less than $1. C) The supply curve for cases of beer would shift to the left by more than $1. D) The supply curve for cases of beer would shift to the left by $1.
A typical market supply curve
a. is identical to the firm's marginal cost curve b. does not reflect any external cost borne by third parties c. is identical to the firm's marginal revenue curve d. reflects external benefits enjoyed by third parties e. is perfectly inelastic
If business decision makers expect that the inflation rate will increase in the near future,
a. long-run aggregate supply will increase. b. long-run aggregate supply will decrease. c. short-run aggregate supply will increase. d. short-run aggregate supply will decrease.
The Federal Reserve____
a. operates independently from Congress and the President b. consists of representatives who are elected by the American people c. is an agency of the US Treasury Dept, which falls under the Executive Branch of govt d. all