Contractionary monetary policy causes
A) aggregate demand to fall and the price level to rise.
B) aggregate demand to rise and the price level to rise.
C) aggregate demand to rise and the price level to fall.
D) aggregate demand to fall and the price level to fall.
D
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When economists say that an interest rate is compounding, they imply that:
A) the rate of interest decreases every year. B) the rate of interest increases every year. C) interest is being earned on interest. D) double the interest payment is received every two years.
What is the Earned Income Tax Credit?
What will be an ideal response?
Legal limits on prices will tend to cause misallocation of resources because
a. production (or opportunity) cost no longer corresponds to market price. b. people are unable to determine their preferences at the high or low price. c. producers no longer have incentive to be profitable. d. consumers no longer have incentive to spend their income efficiently. e. All of the above are correct.
One problem with government operation of monopolies is that
a. a benevolent government is likely to be interested in generating profits for political gain. b. monopolies typically have rising average costs. c. the government typically has little incentive to reduce costs. d. a government-regulated outcome will increase the profitability of the monopoly.