The passage of new legislation that imposes much less government regulation of business will most likely:
a. Increase aggregate demand
b. Decrease aggregate supply
c. Decrease aggregate demand
d. Increase aggregate supply
d. Increase aggregate supply
You might also like to view...
By influencing the current one-year rate and by affecting people's expectations of future short-term rates, the Fed can
A. influence long term interest rates. B. set the reserve rate. C. set the prime rate. D. all of the above.
A rise in the price level has a direct effect on spending because
A) the real value of the money people have decreases and they can buy less with it. B) a higher price gives people more money, and so the more goods and services they can buy. C) the real value of the money people have varies directly with the price level. D) people like to spend more when prices are higher.
If the price of gasoline rises sharply and the demand for sports utility vehicles falls, then the two goods are
A) complements. B) normal goods. C) substitutes. D) inferior goods.
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and current international transactions in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and current international transactions become more negative (or less positive). b. The GDP Price Index rises, and current international transactions become more negative (or less positive). c. The GDP Price Index and current international transactions remain the same. d. The GDP Price Index rises, and current international transactions remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.