If no fiscal policy changes are made, suppose the current aggregate demand curve will increase horizontally by $1,000 billion and cause inflation. If the marginal propensity to consume (MPC) is 0.80, federal policymakers could follow Keynesian economics and restrain inflation by decreasing:
a. government spending by $200 billion.
b. taxes by $100 billion.
c. taxes by $1,000 billion.
d. government spending by $1,000 billion.
a
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The physical and mental effort people use to produce goods and services is a description of which factor of production?
A) physical capital B) labor C) entrepreneurship D) human capital
A sales tax applied to a foreign good or service is known as a(n)
a. progressive tax b. unit tax c. excise tax d. external tax e. customs duty
An increase in the budget deficit makes domestic interest rates
a. rise because the supply of loanable funds shifts left. b. fall because the supply of loanable funds shifts left. c. rise because the demand for loanable funds shifts right. d. fall because the demand for loanable funds shifts right.
In the burglary crime model presented in the textbook, as the anguish cost of committing a burglary rises, the prediction is that
A) more people will commit burglary. B) the same number of people will commit burglary. C) fewer people will commit burglary. D) There is not enough information to answer this question.