In the Keynesian model in the long run, an increase in taxes causes the price level to ________ and the real interest rate to ________
A) fall; rise
B) fall; fall
C) rise; rise
D) rise; fall
B
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When gold prices become more volatile, the ________ curve for gold shifts to the ________; ________ the price of gold
A) supply; right; increasing B) supply; left; increasing C) demand; right; decreasing D) demand; left; decreasing
The most important difference between unit excise taxes and ad valorem excise taxes is _____
a. the unit tax will change in response to a change in the price of the taxed good, while the ad valorem tax will not b. the unit tax will not change in response to a change in the price of the taxed good, while the ad valorem tax will c. the unit tax increases in response to a change in the price of the taxed good, while the ad valorem tax will decline d. the unit tax declines in response to a change in the price of the taxed good, while the ad valorem tax will increase
Wall Street bankers opposed the Second Bank of the United States. Their opposition was based on the idea that the Second Bank
a. lent too freely to the federal government. b. followed a monetary policy that favored stable prices even at the cost of a slower growing economy. c. followed a monetary policy that kept interest rates too high. d. favored Philadelphia because that was where the head office of the bank was located.
One clear function for the government to play in an economy is to:
a. Promote research and development by providing tax breaks to domestic industries that will eventually be able to compete internationally. b. To provide needed goods and services that otherwise would not be provided effectively and/or efficiently by the private sector. c. Levy tariffs and other forms of protection to protect infant industries that will grow to international stature in the future. d. Run deficits when a nation is growing and surpluses when it is contracting.