Historically, Keynesian economists have argued that government spending will stimulate aggregate demand more than tax cuts because
a. government spending will stimulate aggregate demand more quickly than a tax cut.
b. there are fewer adverse side effects to an increase in government spending.
c. all of the spending will add to aggregate demand, but a portion of the tax cut will be saved.
d. an increase in government spending can quickly be reversed once the economy has recovered.
C
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If consumers believe the price of iPads will decrease in the future, this will cause the demand for iPads to decrease now
Indicate whether the statement is true or false
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for frozen yogurt. Which panel describes what happens in the market for frozen yogurt when the price of ice cream, a substitute product, increases?
A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
Which of the following correctly describes the relationship between private-sector spending and the federal budget?
a. A decline in private-sector spending reduces the demand for government services, that reduces fiscal outlays and contributes to a budget surplus. b. An increase in private-sector spending must be matched by increase in government spending. This increases fiscal outlays and contributes to a budget deficit. c. A decline in private-sector spending triggers automatic stabilizers that result in a federal budget deficit. d. An increase in private-sector spending must be matched by increase in government spending. This increases fiscal outlays and contributes to a balanced budget.
Arbitrage is the act of buying at one place and selling at another place in order to profit from the price differences that exist between the two places.
Answer the following statement true (T) or false (F)