Ignoring any supply-side effects, if government expenditure on goods and services decreases by $10 billion and taxes decrease by $10 billion, then real GDP ________ and the price level ________
A) increases; rises
B) increases; falls
C) decreases; rises
D) decreases; falls
E) does not change; does not change
D
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A hurricane destroyed the peach crop in South Carolina. Shortly thereafter the price of peaches rose significantly. These events suggest that a(n):
a. decrease in the supply of peaches caused the price of peaches to rise. b. increase in the supply of peaches caused the price of peaches to rise. c. increase in demand caused the price of peaches to rise. d. decrease in demand caused the price of peaches to rise.
If the demand for bananas is elastic, then an increase in the price of bananas will
a. increase total revenue of banana sellers. b. decrease total revenue of banana sellers. c. not change total revenue of banana sellers. d. There is not enough information to answer this question.
What is the proper sequence of the phases of a business cycle?
A) peak, contraction, trough, expansion, recovery B) peak, contraction, recovery, trough, expansion C) peak, contraction, trough, recovery, expansion D) contraction, peak, trough, recovery, expansion E) recovery, trough, peak, expansion, contraction
Refer to the above table. Assume the consumer spends his entire income. The price of hamburger is $1, the price of a movie is $6, and the consumer has $15. What is the consumer's optimum?
