Which of the following statements is true regarding expansionary fiscal policy?
A) It leads to an increase in the supply of bonds by the Treasury.
B) It leads to a fall in interest rates.
C) It leads to an increase in net exports.
D) It tends to reduce to size of government.
Answer: A) It leads to an increase in the supply of bonds by the Treasury.
Economics
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Studies show that the income elasticity of demand for wine is 5.03 and the income elasticity of demand for spirits is 1.21. This indicates that
A) wine is a luxury good and spirits are necessities. B) wine and spirits are luxury goods. C) wine is a luxury good and spirits are inferior goods. D) wine and spirits are highly price elastic.
Economics