The proposition that an increase in the federal budget deficit caused entirely by a current tax cut has no effect on aggregate demand is called the
A) Ricardian equivalence theorem.
B) interest rate effect.
C) indirect effect.
D) open-economy effect.
Ans: A) Ricardian equivalence theorem.
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The greater the price elasticity of market demand, the less will be the reduction in market output from a price floor.
Answer the following statement true (T) or false (F)
Jobs in rural areas generally pay lower wages than jobs in urban areas because there are limits to labor mobility
a. True b. False
The money demand curve shifts to the right whenever there is a decrease in the interest rate
a. True b. False Indicate whether the statement is true or false
How did a great expansion of globalization in the late 1990s increase productivity?
A. Businesses learned how to use computers to produce more output with fewer workers. B. Businesses began sending workers overseas for more training. C. Businesses were able to sell in larger markets as tariffs and import quotas were reduced. D. Businesses learned how to use foreign suppliers to cut costs.