In the medium run, a tax increase that causes a reduction in the budget deficit will

A) affect only the price level.
B) not affect the price level but will alter the composition of output.
C) not affect the level of output, but will affect the composition of output.
D) affect both the level and composition of output.


C

Economics

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Actual investment spending does not include

a. spending on consumer durable goods. b. spending on new capital equipment. c. spending on new houses. d. changes in inventories.

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Country X exports 10 million tonnes of wheat to Country Y. Which of the following will happen in this case?

A) Country X's GNP will decrease. B) Country Y's GNP will increase. C) Country Y's GDP will increase. D) Country X's GDP will increase.

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If tastes are homothetic, there exists a utility function (that represents those tastes) such that the indirect utility function is homogeneous of degree 1 in income.

Answer the following statement true (T) or false (F)

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How do constraints on monetary policy in the United States differ from those experienced by euro zone countries?

What will be an ideal response?

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