Holding all else constant, an increase in consumption taxes, such as sales taxes or a VAT, will ________ the price of consumption goods and ________ output
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
B
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In order to ________, a government must decrease spending and increase taxation
A) increase aggregate demand B) decrease aggregate supply C) increase aggregate supply D) decrease aggregate demand
Monetarists think that the Fed should use ________ as a target when conducting monetary policy
A) the inflation rate B) the Treasury bill rate C) the money supply D) the federal funds rate E) the unemployment rate
According to classical economists, the relationship between the amount of funds firms invest and the interest rate is
A) direct. B) inverse. C) indirect. D) independent.
The fastest growing component of the annual federal budgets since 2000 is
A. the education budget. B. interest payments on government debt. C. funding for health research. D. entitlement payments.