Either an increase in autonomous net taxes or a decrease in government purchases can close an expansionary gap
a. True
b. False
Indicate whether the statement is true or false
True
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On December 10 the price of a Christmas tree is $50 and 100 trees are purchased. On December 20 the demand for Christmas trees decreases so that the price falls to $30 and 20 trees are purchased. From this set of facts, the
A) demand for Christmas trees is price inelastic. B) demand for Christmas trees is price elastic. C) supply of Christmas trees is inelastic. D) supply of Christmas trees is elastic.
If a government increases its budget deficit, then domestic interest rates
a. and net exports rise. b. rise and net exports fall. c. fall and net exports rise. d. and net exports fall.
Fiscal policy changes in government spending and taxes primarily target the aggregate supply curve.
Answer the following statement true (T) or false (F)
The resources used to make all goods and services are the:
a) production possibilities b) factors of production c) production trade-offs d) opportunity costs