The United States is experiencing recession, so Congress adopts an expansionary fiscal policy. State governments face a budget shortfall and raise taxes to balance their budgets. The actions of state governments would:
A. partially offset the fiscal policy.
B. slightly increase aggregate supply.
C. slightly increase aggregate demand.
D. partially reinforce the fiscal policy.
Answer: A
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A demand schedule relates prices of a particular good to quantities demanded.
Answer the following statement true (T) or false (F)
Assume an analyst has been hired to estimate the price elasticity of demand for Levi's brand blue jeans and for blue jeans in general. Ceteris paribus, we would expect the price elasticity of demand in absolute value to be:
A) larger for Levi's brand blue jeans than for blue jeans in general. B) larger for blue jeans in general than for Levi's brand blue jeans. C) approximately the same for both Levi's brand blue jeans and blue jeans in general. D) none of the above because the market for blue jeans cannot be analyzed using the model of supply and demand.
The most powerful tool unions have at their disposal when bargaining with management is
A) the Taft-Hartley Act. B) the ability to strike. C) the secondary boycott. D) the power of pure competition.
The marginal cost curve of a firm above AVC is also its short-run supply curve.
Answer the following statement true (T) or false (F)