If the public switches from using cash for most transactions to using checks instead, then all else equal, the money supply will:
A. not change.
B. decrease.
C. either increase or decrease.
D. increase.
Answer: D
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The difference between consumption spending and disposable income _____
a. decreases as income increases b. stays proportionally the same as income increases c. decreases if the interest rate increases d. equals the amount of taxes paid e. equals saving
A value-added tax or VAT is a tax on
a. retail purchases only. b. wholesale purchases only. c. pollution. d. all stages of production of a good.
In the long-run equilibrium of a market with free entry and exit, if all firms have the same cost structure, then
a. marginal cost exceeds average total cost. b. the price of the good exceeds average total cost. c. average total cost exceeds the price of the good. d. firms are operating at their efficient scale.
The concept that increased government spending will lead to lower investment and consumer spending is referred to as the
A. inflationary effect. B. Keynesian effect. C. crowding-out effect. D. recessionary effect.