Which of the following monetary policies would be appropriate to close a recessionary gap?
a. A tax cut
b. A decrease in government purchases
c. An increase in reserve requirements
d. The Fed's purchase of U.S. government securities
e. The Fed's raising the discount rate
d
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In the graph showing aggregate demand and aggregate supply after a positive supply shock, we can see that at Point B, ______ at Point A.
a. RGDP is higher than
b. RGDP is lower than
c. price levels are the same as
d. price levels are lower than
What are the consequences of a firm exercising monopoly power?
A. Higher price and larger quantity sold. B. Higher price and smaller quantity sold. C. Lower price and larger quantity sold. D. Lower price and smaller quantity sold.
A distinguishing characteristic of public transfer payments is that:
A. there is a tax on the amount of the subsidy above a certain income level. B. the recipients make no contribution to current production in return for them. C. they are used to subsidize the major transportation carriers to reduce transportation costs. D. they are counted as part of government purchases in the calculation of the gross domestic product.
Explain why it is that how much consumers pay for an excise tax depends on how responsive they are to a given change in market price
What will be an ideal response?