If the government wishes to promote a higher rate of growth of real GDP, a supply-side economist would argue the appropriate policy is
A. leaving the economy alone and letting the natural forces bring it into a long-run equilibrium.
B. engaging in expansionary fiscal policy by lowering marginal tax rates.
C. engaging in expansionary fiscal policy of increasing government spending.
D. lowering marginal tax rates on people and raising them on corporations.
Answer: B
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Refer to the Article Summary. Use a graph to illustrate average total cost curves for Macy's before and after closing the 35 to 40 stores. Assume that after closing the stores, Macy's will be producing at minimum average total cost
What will be an ideal response?
A decrease in the price level will
A) shift the aggregate demand curve to the right. B) move the economy down along a stationary aggregate demand curve. C) move the economy up along a stationary aggregate demand curve. D) shift the aggregate demand curve to the left.
In year 1 the CPI is 181, and in year 2 the CPI is 195. If Dennis's salary was $95,000 in year 1, what is the minimum salary he must earn in year 2 to "keep up with inflation"?
A) $112,500 B) $102,348 C) $105,750 D) $88,180
How does taking factors of investment, government spending, and net exports into account change the level of aggregate expenditure?
a. It increases the level of aggregate expenditure. b. It decreases the level of aggregate expenditure. c. It has no effect on the level of aggregate expenditure. d. It depends on the level of consumption.