A movement along a consumption function is caused by a change in
a. households' real assets
b. interest rates
c. taxation policy
d. expectations of price changes
e. households' incomes
E
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If the economy is operating on the relatively vertical segment of the aggregate supply curve, an increase in government spending causes a _____ change in the price level and a _____ change in output.
a) big; big b) big; small c) small; big d) small; small
When the government imposes a barrier to entry in a market,
a. more resources will be wasted by firms attempting to secure and maintain market power. b. the options available to consumers will increase in the protected market. c. allocative efficiency will be improved by the reduction of wasteful competition. d. consumers will be better able to direct the smaller number of producers to serve their interests.