Refer to the diagram, in which Q f is the full-employment output. If the economy's current aggregate demand curve is AD 0 , it would be appropriate for the government to:
A. reduce government expenditures and taxes by equal-size amounts.
B. reduce government expenditures or increase taxes.
C. increase government expenditures or reduce taxes.
D. reduce unemployment compensation benefits.
C. increase government expenditures or reduce taxes.
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If immigration increases the productivity of domestic workers, then it:
A. Decreases the return on capital B. Means that immigrant workers and domestic workers are substitutes C. Means that immigrant workers are entering low-wage occupations D. Increases the return on capital
Consider two economies: Barylia and Lithasia. The GDP per capita in Lithasia is $6,000 while the GDP per capita in Barylia is $12,000. Both countries grow exponentially at an annual rate of 10%
How will their GDPs vary over the next year? Is there any limitation of comparing the absolute levels of GDP per capita of both countries over the next years? If yes, what is a plausible solution?
In constructing models, economists:
A. make simplifying assumptions. B. include all available information. C. must use mathematical equations. D. attempt to duplicate the real world.
Suppose there is a decrease in the confidence that workers have in their future employment and income. This will cause
A. a decrease in borrowing, which will decrease interest rates. B. a decrease in saving, which will decrease interest rates. C. a decrease in saving, which will increase interest rates. D. a decrease in borrowing, which will increase interest rates.