An increase in government expenditures may lead people to expect that in the future taxes will rise and create greater distortions. By themselves these changes in expectations lead people to
a. raise both consumption and investment.
b. raise consumption but reduce investment.
c. raise investment but reduce consumption.
d. reduce both consumption and investment.
d
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In the above figure, if the price is $12, a profit-maximizing perfectly competitive firm will have an economic profit
A) of less than $100 but more than $0. B) of more than $100. C) that is negative, that is, it will have an economic loss. D) of zero, that is, it will break even with a normal profit.
Efficiency of the median voter model outcome occurs when _____
a. Lindahl pricing is employed. b. a head tax is used to finance the policy c. progressive taxation is used to finance government d. special interests are non-existent
Like other major government programs, an individual knows his contributions to Social Security from the information on his W-2 form
a. True b. False
According to Keynesian economics, if there are unutilized resources in the economy and aggregate demand decreases
A) real GDP will rise and price level will remain constant. B) real GDP will fall and price level will remain constant. C) real GDP will rise and price level will rise. D) real GDP will rise and price level will fall.