Explain how a consumption tax could lead to a decrease in real interest rates
A tax on consumption would discourage individuals from making purchases. As a result, these individuals would be saving more. That would lead to an increase in the supply of loanable funds which would lead to a decrease in real interest rates.
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Equilibrium expenditure is
A) the amount of aggregate expenditure at which aggregate planned expenditure exceeds real GDP. B) the amount of aggregate expenditure at which aggregate planned expenditure equals real GDP. C) when unplanned inventory change is positive. D) when unplanned inventory change is zero or negative. E) the amount of aggregate expenditure at which aggregate planned expenditure is less than real GDP.
If A and B are two disjoint sets, and "Pr" represents the probability, then Pr[A and B] will be:
a. negative. b. infinity. c. unity. d. zero.
In anonymous surveys, on average people rate themselves as "above average" with regard to characteristics such as intelligence, perceptiveness, and driving ability. According to behavioral economics, this contradictory result would most likely be caused
by the: A. overconfidence effect. B. self-serving bias. C. confirmation bias. D. hindsight bias.
Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward