What policy shifts the aggregate demand curve the farthest leftward?
What will be an ideal response?
a decrease in government purchases of $10 billion
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When the price of one pen is $1, 50 notebooks are demanded. When the price per pen increases to $5, the number of notebooks demanded decreases to 30. What is the cross-price elasticity of demand between the two goods using the arc method?
A) 0.1 B) -0.375 C) 3 D) -3
In the Keynesian model,
a. the autonomous expenditure multiplier is lower than the tax multiplier. b. the autonomous tax multiplier is positive and large. c. the autonomous tax multiplier is larger (in absolute value) than the tax multiplier. d. the tax multiplier is equal to 1. e. none of the above.
Which of the following is true of a corporation's stock?
a. Stocks are highly illiquid assets. b. Stocks can be easily transferred from one person to another. c. Dividends declared on stocks are not subject to personal income tax. d. Dividend declared on stocks assure a steady income to the stockholders.
According to Keynesians, an increase in saving will not cause national income to fall
a. as long as autonomous consumption is greater than zero b. if the price level remains unchanged c. if it results from a decrease in aggregate expenditure d. if it is accompanied by a decrease in aggregate expenditure e. if it results from an increase in aggregate expenditure