Which of the following assumptions is true of government spending and taxes?
a. They do not depend upon on the level of GDP
b. They may be changed only through direct action by the Congress.
c. They change only when the price level changes.
d. They change only upon executive order by the president of the United States.
e. They are autonomous at low levels of GDP but not at higher levels of GDP.
a. They do not depend upon on the level of GDP
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A monopoly is a firm that is the only seller of a good or service that does not have
A) a close complement. B) a close substitute. C) a patent. D) a barrier to entry.
In a prison, cigarettes are used as a medium of exchange. In this scenario, a cigarette is an example of: a. near money
b. fiat money. c. fiduciary money. d. commodity money.
Exhibit 19-4 Balance sheet of Tucker National Bank Assets Liabilities Required reserves$ 4,000 Checkable deposits$20,000 Excess reserves16,000 Loans 0 Total$20,000 Total$20,000 Assume all banks in the system started with the balance sheet shown in Exhibit 19-4 and the Fed makes a $1,000 open market purchase. The result would be a(n):
A. infinite contraction of the money supply. B. infinite expansion of the money supply. C. $1,000 expansion of the money supply. D. $5,000 expansion of the money supply.
The effect of imposing a lump-sum tax is to:
A. reduce the absolute levels of consumption and saving at each level of GDP and to reduce the size of the multiplier. B. reduce the absolute levels of consumption and saving at each level of GDP but to not change the size of the multiplier. C. reduce the absolute levels of consumption and saving at each level of GDP and to increase the size of the multiplier. D. increase the absolute levels of consumption and saving at each level of GDP and to increase the size of the multiplier.