When there is an increase in government expenditures, which of the following raises investment spending?
a. the investment accelerator and crowding out
b. the investment accelerator but not crowding out
c. crowding out but not the investment accelerator
d. neither the investment accelerator or crowding out
b
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In the short run, a decrease in wage rates, ceteris paribus, shifts the
A) AD curve to the right, causing equilibrium price level to rise and equilibrium Real GDP to increase. B) AD curve to the left, causing equilibrium price level to fall and equilibrium Real GDP to decrease. C) SRAS curve to the right, causing equilibrium price level to fall and equilibrium Real GDP to increase. D) SRAS curve to the left, causing equilibrium price level to rise and equilibrium Real GDP to decrease.
Which of the following would shift the aggregate demand curve to the right?
A) an increase in government spending B) an increase in taxes C) an increase in interest rates D) an increase in input prices
In the real world, demand is not likely to be perfectly inelastic at every price because
a. no substitutes exist for some goods b. some consumers will be unable to afford very high prices with given incomes c. at low prices, consumers always want a lot d. consumers are willing to pay any price for certain goods e. the prices of certain goods don't change
If the stock market falls by 25 percent next year and remains down, what is most likely to happen to the consumption function?
a. It will shift upward. b. It will shift downward. c. It will not shift, but people will move downward along the consumption function. d. It will not shift, but people will move upward along the consumption function.