Refer to Figure 11.4. Which diagram illustrates the effect of a decrease in the income tax rate?
A) A B) B C) C D) D
A
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U.S. exports
a. represent approximately 50 percent of GDP b. represent approximately 35 percent of GDP c. represent approximately 11 percent of GDP d. consist primarily of agricultural commodities e. consist primarily of metals and other raw materials
When should a firm shut down in the short run?
a. When its revenues cannot cover its variable costs b. When its revenues cannot cover its fixed costs c. When price equals the minimum average variable d. When it is unable to make any accounting profits
A lower domestic price level raises aggregate expenditures and, therefore, shifts the aggregate demand curve to the right
a. True b. False Indicate whether the statement is true or false
Describe the immediate short-run effect to the economy from an increase in government purchases, as well as the self-correcting mechanism that will restore long-run equilibrium.
What will be an ideal response?