Suppose the economy is at a short-run equilibrium with real GDP greater than potential GDP. Which of the following fiscal policies would decrease real GDP and the price level?
a) an increase in government expenditure
b) a decrease in taxes
c) an increase in taxes
d) none of the above is correct
c) an increase in taxes
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In a repeated game, punishments that result in heavy damages are an incentive for players to adopt the strategies that result in a ________ equilibrium
A) contestable B) strategic C) cooperative D) winner-share-all
If a government enacts a rent control to protect apartment tenants, the result is likely going to be
a. an increase in rents with a surplus of apartments. b. an increase in rents with a shortage of apartments. c. a decrease in rents with a surplus of apartments. d. a decrease in rents with a shortage of apartments.
In a typical college town, when students go home for the summer, the demand for many items such as pizza and textbooks
a. decreases, which is a shift to the left of the demand curves for these goods. b. decreases, which is a shift to the right of the demand curves for these goods. c. increases, which is a shift to the left of the demand curves for these goods. d. increases, which is a shift to the right of the demand curves for these goods.
In France a loaf of bread costs 3 euros. In Great Britain a loaf of bread costs 4 pounds. If the exchange rate is .9 pounds per euro, what is the real exchange rate?
a. 4/2.7 loaves of British bread per loaf of French bread b. 3.6/3 loaves of British bread per loaf of French bread c. 3/3.6 loaves of British bread per loaf of French bread d. 2.7/4 loaves of British bread per loaf of French bread