If the demand and supply both increase equally, then the equilibrium price ________ and the equilibrium quantity ________
A) increases; increases
B) increases; does not change
C) does not change; increases
D) increases; decreases
E) decreases; does not change
C
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The short run Phillips curve
A) shows that any inflation rate can co-exist with the natural unemployment rate. B) shows the tradeoff between the inflation rate and the unemployment rate, and it shifts when the expected inflation rate changes. C) shows the relationship between the inflation rate and the expected inflation rate, and it shifts when the natural unemployment rate changes. D) shows the relationship between the inflation rate and the nominal interest rate, and it shifts when the natural unemployment rate changes. E) shows the tradeoff between the inflation rate and the unemployment rate and it shifts when the inflation rate changes.
Fiscal policy involves ________
A) taxes and government spending B) setting interest rates C) controlling the amount of money in the economy D) all of the above E) none of the above
Adverse selection and moral hazard problems arise when there is
A) complete information B) asymmetric information. C) too much information. D) symmetric information.
The GDP of Country A is equal to $124.5 billion, and the consumption expenditure in the economy is $85.9 billion. The government of Country A charges a flat tax rate of 20 percent. The government also spends $4.5 billion per year in the form of transfer payments. The household saving in the country is:
a. $38.6 billion. b. $22.5 billion. c. $13.7 billion. d. $12.9 billion.