Which of the following is TRUE about how the aggregate demand curve differs from the individual's demand curve?
A. The individual's demand curve will shift when there is a change in taxes while the aggregate demand curve will not.
B. The individual's demand curve shows the relationship between price and quantity demanded while the aggregate demand curve is not influenced by price.
C. The individual's demand curve is just for an individual while the aggregate demand curve looks at the entire circular flow of income.
D. For the individual's demand curve equilibrium is determined by the intersection of supply and demand while for the aggregate demand curve equilibrium is determined by the real balance effect.
Answer: C
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Based on the following information, what is the balance on the current account?
Exports of goods and services = $5 billion Imports of goods and services= $3 billion Net income on investments = -$2 billion Net transfers = -$2 billion Increase in foreign holdings of assets in the United States = $4 billion Increase in U.S. holdings of assets in foreign countries = -$1 billion A) -$2 billion B) $1 billion C) $3 billion D) $4 billion
Many environmentalists have advocated a substantial increase in the gasoline tax to cut down the federal deficit and to reduce pollution due to auto emissions. Such a tax increase would be devastating to people who commute significant distances to work. In fact, it would provide an incentive to relocate closer to work or change jobs. Economists refer to such effects of taxes as the
a. burden of a tax. b. regressive incidence of a tax. c. incidence of a tax. d. excess burden of a tax.
When society gets the most it can from its scarce resources, then the outcome is called
a. equitable. b. efficient. c. normal. d. efficacious.
If Congress increased the tax rate on interest income, investment
a. would increase and saving would decrease. b. would decrease and saving would increase. c. and saving would increase. d. and saving would decrease.