One way fiscal policy affects aggregate demand is:
A. directly through tariffs.
B. indirectly through government spending.
C. directly through taxation.
D. indirectly through taxation.
Answer: D
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
? PriceQuantity Demanded Quantity Supplied $101,000 5,500 92,0005,00083,0004,50074,0004,00065,0003,50056,0003,00047,0002,50038,0002,00029,0001,500110,0001,000? Refer to Table 4-1. What is the equilibrium price in the example above?
A. $9 B. $8 C. $7 D. $6 E. $5
To illustrate the classical argument that "supply creates its own demand," the aggregate supply curve should be drawn:
a. downward-sloping. b. upward-sloping. c. horizontal. d. vertical.
An automobile is an asset, but it is not liquid because:
A. the owner may still be making payments on the loan. B. the automobile may not be in good repair. C. the transactions costs for turning it into money are high. D. the automobile cannot be sold without a loss in value.