How will a $25 million increase in taxes and Gov't spending affect the economy?

Price Level: increase, Real GDP increase

What is the effect on employment and price level if AD shifts right and AS is vertical?

Employment: No Change, Price Level: Increase

Which of the following is a fiscal policy that would increase aggregate demand?

decrease in personal income taxes

Which of the following best describes aggregate supply?

A schedule of the output produced at each price level

studbud

AP AD/AS

10 termsStudBud Administration115 plays

Imported from external platform

Flashcards10 cardsFPractice quizPHost liveL

Questions 10

Answers

1
Maria's disposable income increases from $600 to $650, her spending changes from $480 to $520
Her MPS= .8
Her MPC= .8
Her MPS= .25
Her MPC= .4
2
I: progressive income tax II: Unemployment compensation III: Congressional action to lower tax
I, II, and III
I and II
III only
I only
3
How will a $25 million increase in taxes and Gov't spending affect the economy?
Price LEvel: Increase, Real GDP: Decrease
Price Level: increase, Real GDP increase
Price Level: no change, Real GDP: No Change
Price Level: decrease, Real GDP: decrease
4
What is the effect on employment and price level if AD shifts right and AS is vertical?
Employment: No Change, Price Level: No Change
Employment: Decrease, Price Level: No Change
Employment: No Change, Price Level: Increase
Employment: Increase, Price Level: Increase
5
In order to be a non-discretionary policy, what must taxes do during periods of recession?
Increase AD, decrease price level
Increase AD, and decrease output
increase AD, increase output
decrease AD and increase output
6
MPC is .75 and gross investment increases by $6 billion by how much will Real GDP increase?
6 billion
24 billion
12 billion
42 billion
7
An increase in our country's capital stock will cause:
AD to Shift right
AD to shift left
PPC to shift left
LRAS to shift right
8
Which of the following is a fiscal policy that would increase aggregate demand?
An increase in corporate income tax
a purchase of bonds by the federal reserve
decrease in personal income taxes
a decrease in government spending
9
A change in which of the following will cause the aggregate demand curve to shift?
Price of inputs
Productivity rates
Energy prices
Consumer wealth
10
Which of the following best describes aggregate supply?
A schedule that shows the relationship in inputs and outputs
The amount buyers plan to spend out output
A schedule of the output produced at each price level
The trade-off between inflation and unemployment

AP AD/AS Flashcards | StudBud