Which of the following actions would cause the aggregate demand curve to shift to the left?
A. a decrease net export spending caused by an appreciation of the home currency
B. an increase in government spending caused by increased spending on highways and bridge construction
C. an increase in exports caused by an increase in economic activity in the European Union
D. an increase in consumer spending caused by a cut in the personal income tax rate
Answer: A
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Even when measured accurately, GDP may be a misleading measure of economic welfare because it cannot account for
A) the value of government spending and how efficiently we produce goods and services. B) how efficiently we produce goods and services and the value of non-market production. C) the value of non-market production and the consequences of an unequal distribution of income. D) the consequences of an unequal distribution of income and the value of government spending.
The AD Curve ________
A) demonstrates how central banks respond to changes in interest rates by changing the inflation rate B) shows how changes in equilibrium output affect the inflation rate C) explains long run fluctuations in output and inflation D) all of the above E) none of the above
Suppose Winston's annual salary as an accountant is $60,000, and his financial assets generate $4,000 per year in interest. One day, after deciding to be his own boss, he quits his job and uses his financial assets to establish a consulting business, which he runs out of his home. To run the business, he outlays $8,000 in cash to cover all the costs involved with running the business, and earns revenues of $150,000. What are Winston's explicit costs?
A. $64,000 B. $72,000 C. $8,000 D. $12,000
In practice, placing a price control on a natural monopoly:
A. is easy and commonly practiced. B. is difficult because of lack of information. C. always creates the same outcome as public ownership of the industry. D. is never a good idea.