During a recession unemployment benefits rise. This rise in benefits makes aggregate demand higher than otherwise
a. True
b. False
Indicate whether the statement is true or false
True
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Refer to the above figure. Suppose the original long-run equilibrium was at point B. What could have caused the move to the current equilibrium?
A) Aggregate demand must have decreased. B) Input prices must have increased, causing long-run aggregate supply to increase. C) Decreases in the price level caused short-run aggregate supply to fall. D) A temporary reduction in production due to bad weather.
The Tax Reform Act of 2004
a. lowered marginal income tax rates. b. cut taxes on inheritance payments. c. lowered taxes or corporate dividends. d. Both b and c e. All of the above
Use the Slutsky equation to show that a Giffen good must be an inferior good, BUT an inferior good need not be a Giffen good
What will be an ideal response?
Which of the following is true?
A) Even when they are economically free, high-income countries have been unable to achieve high growth rates. B) Even when low-income countries adopt institutions and policies supportive of economic freedom, they are unable to achieve high growth rates. C) When low-income countries adopt institutions and policies supportive of economic freedom, they are able to achieve high growth rates. D) Even when they are economically free, low-income countries have been unable to achieve high growth rates.