Contractionary fiscal policy to prevent real GDP from rising above potential real GDP would cause the inflation rate to be ________ and real GDP to be ________
A) higher; higher
B) higher; lower
C) lower; higher
D) lower; lower
Answer: D
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According to the Bureau of Economic Analysis, household disposable income fell by 0.3 percent of August, 2012. If all else remains the same, what is the likely impact of this fall on the real interest rate?
A) The real interest rate will rise. B) The real interest rate will fall. C) A change in household disposable income will have no impact on the real interest rate. D) The impact on the real interest rate is ambiguous.
Which of the following is the best example of a short-run adjustment?
A) Toyota builds a new assembly plant in Texas. B) Smith University completed negotiations to acquire a large piece of land to build its new library. C) Your local Wal-Mart hires two more associates. D) A local bakery purchases another commercial oven as part of its capacity expansion.
The federal income tax _____________ compared to a state sales tax.
A. has a lower administrative burden B. is less efficient C. is less complex D. is easier to administer
A study of what manufacturers thought their average total cost curves look like revealed that most
a. believe their ATC is downward sloping b. believe their ATC is horizontal c. believe their ATC is upward sloping d. believe their ATC is U-shaped e. do not know what their ATC looks like