All of the following would be included in planned aggregate expenditure EXCEPT:
A. spending on consumer durables.
B. sales of domestically produced goods to foreigners.
C. interest paid on the government debt.
D. planned changes in inventories.
Answer: C
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When a bank repays a _________________ loan, the Fed _____________________ the bank's reserve account
A) overnight; subtracts the repayment from B) overnight; adds the repayment to C) discount; adds the repayment to D) discount; subtracts the repayment from
Which of the following conditions makes it most likely for a quota to be imposed?
A) The benefits of the quota are spread over many and the costs are concentrated on a few. B) The benefits of the quota are spread over many and the costs are spread over many. C) The benefits of the quota are spread over few and the costs are spread over many. D) The benefits of the quota are spread over few and the costs are spread over few. E) There is not enough information to answer the question.
Which statement best explains why demand for gasoline is inelastic?
a. Gasoline prices are currently very high. a. There is no substitute available c. Gasoline uses a small portion of a person's income. d. People have already cut back their driving to the minimum.
Government spending affects aggregate demand directly, and tax changes affect aggregate demand indirectly. Therefore, changes in
A. taxes are ineffective in changing aggregate demand. B. government spending affect aggregate demand more quickly than changes in taxes. C. taxes are virtually useless as a stabilization tool. D. government spending should be used with great caution.