Suppose fiscal authorities raise state income tax rates. As a result, disposable income falls, thereby
A) decreasing consumption spending, and causing the aggregate demand curve to shift to the left.
B) decreasing consumption spending, and causing a movement along a given aggregate demand
curve.
C) increasing saving, and causing the aggregate demand curve to shift to the left.
D) increasing saving, and causing a movement along a given aggregate demand curve.
Ans: A) decreasing consumption spending, and causing the aggregate demand curve to shift to the left.
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Tariffs
a. benefit consumers by lowering prices b. harm producers by decreasing competition in the product market c. harm consumers by increasing the quantity of goods available d. skew the terms of trade in favor of importing nations e. benefit domestic producers because they can charge higher prices and sell more output
Which of the following summarizes the feedback loop discussed in the video?
A. As the money supply increased, real GDP decreased, which caused the money supply to increase even faster, and so on. B. As the money supply increased, prices rose, which caused the money supply to increase even faster, and so on. C. As prices rose faster, the government had to print even more money, which caused prices to rise even faster, and so on. D. As prices rose faster, real GDP increased, which caused prices to rise even faster, and so on.
When you go to a baseball game your ticket specifies your seat and section of the stadium where the seat is located. Assuming the seats all cost nearly the same to install and maintain, what pricing strategy would you expect the team officials to adopt if a full stadium with a maximum of satisfied customers and at least normal profit is the goal?
A. Price all seats at cost, which includes normal profit. B. Price above cost for seats with the best view and below cost for less desirable seats so the gain from those willing to pay more for the best seats offsets the loss on the cheap seats. C. Price all seats above cost so if there are empty seats, at least total costs can hopefully be covered. D. Price above cost for the seats with the best view and price at cost for the rest even if this means the stadium is not full. At least total cost with normal profit will be achieved.
What is likely to happen to resource demand in the next few decades?
What will be an ideal response?