The balanced budget multiplier says that
A. An increase in government spending paid for by a tax increase of equal size has no effect on aggregate demand.
B. An increase in government spending must be paid for by a tax cut of equal size.
C. An increase in government spending paid for by a tax increase of equal size shifts aggregate demand leftward.
D. An increase in government spending paid for by a tax increase of equal size shifts aggregate demand rightward.
Answer: D
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All else equal, relative to a person who earns minimum wage, a person who earns $30 per hour has:
A. a lower opportunity cost of driving farther to work. B. a higher opportunity cost of taking the day off work. C. the same opportunity cost of spending time on leisure activities. D. a higher opportunity cost of working an additional hour.
From 1948 to 2011, the average unemployment rate in the United States was approximately
A) 9.6 percent. B) 24.4 percent. C) 5.8 percent. D) 12.0 percent. E) 3.1 percent.
What effect does a price hike have on the total revenue of the producers?
What will be an ideal response?
Which of the following is a simplifying assumption associated with the short-run Keynesian model of equilibrium real Gross Domestic Product (GDP) determination?
A) Gross private domestic investment exceeds net private domestic investment. B) Most business profits are distributed to shareholders. C) Businesses pay indirect taxes. D) There is no depreciation.