An increase in aggregate demand is most likely to be caused by:
A. An increase in real interest rates
B. A decrease in government spending
C. A decrease in expected returns on investment
D. A decrease in the tax rates on household income
D. A decrease in the tax rates on household income
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The opportunity cost of capital is
A) the rate of return realized on an investment. B) the rate of return that could be earned by the owner's capital were it used elsewhere. C) the rate used to calculate a firm's tax liability. D) the rate of interest the government uses to calculate legal business tax penalties.
What determines the equilibrium wage and quantity for labor in competitive markets?
a. the intersection of the market supply of labor and the market demand for labor b. the influence of union-negotiated wages and limits on working hours c. the intersection of minimum wage and the market demand for labor d. the balance of substitution effect and the income effect
You notice that the price of butter rises and then falls. The best explanation for this is that:
A. demand for butter increased causing price to rise, which attracted other firms to enter the market causing supply to increase, which caused the price to go back down. B. demand for butter decreased causing price to rise, which attracted other firms to enter the market causing supply to increase, which caused the price to go back down. C. demand for butter increased causing price to rise, which induced other firms to exit the market causing supply to decrease, which caused the price to go back down. D. demand for butter increased causing price to rise, which attracted other firms to enter the market causing supply to decrease, which caused the price to go back down.
A pollution tax:
A. is a method used to internalize external costs. B. will not affect the price of the good being produced. C. does not affect the quantity of a good demanded. D. is a method used to externalize internal costs.