The aggregate supply-aggregate demand model predicts that the short-run effect of an unexpected decrease in taxes is:
a. A decrease in the price level and an increase in real output.
b. An increase in both the price level and real output.
c. An increase in the price level and a decrease in real output. .
d. A decrease in both the price level and real output.
e. No effect on the price level and a decrease in real output.
d. A decrease in both the price level and real output.
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Assuming all else equal, if there is a contraction in the quantity of bank account balances, it will cause:
A) a downward movement along the demand curve for reserves. B) a leftward shift in the demand curve for reserves. C) a rightward shift in the demand curve for reserves. D) an upward movement along the demand curve for reserves.
In the short run, a perfectly competitive firm suffering a loss
a. will close if P < AVC b. will shut down operations if P < MC c. cannot leave the industry even if P < AVC d. can sell off all its resources to competitors e. can raise the price to increase revenues
The crowding-out effect refers to the situation where
A. foreign spending is favored over domestic spending. B. government borrowing reduces private sector borrowing and spending. C. the United States Treasury prints new money that the government uses to force increases in private investment. D. the creation of large amounts of money to finance government borrowing produces an inflation that forces private spending to decrease.
The effort used to coordinate the factors of production is a description of:
A. physical capital. B. human capital. C. labor. D. entrepreneurship.