Which of the following is an appropriate fiscal policy response to high inflation?
a. increase interest rates
b. increase government purchases
c. decrease taxes
d. none of the above
d
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Because Product X has a very small, positive income elasticity of demand, it is likely that product X is a
A) luxury. B) necessity. C) product with many good substitutes. D) product with many good complements.
Refer to Figure 4-10. Suppose that instead of a price ceiling, the government imposed a price floor of R1. What is the quantity of apartments demanded at the new price?
A) Q1 B) 0 C) Q0 D) Q*
Spending on the war in Afghanistan is essentially categorized as government purchases. How do decreases in spending on the war in Afghanistan affect the aggregate demand curve?
A) They will shift the aggregate demand curve to the right. B) They will shift the aggregate demand curve to the left. C) They will move the economy up along a stationary aggregate demand curve. D) They will move the economy down along a stationary aggregate demand curve.
There is ________ relationship between inflation and central bank independence and ________ relationship between long-run rates of unemployment and central bank independence
A) a negative; no B) a negative; a negative C) a positive; no D) a positive; a negative