Answer the following questions true (T) or false (F)
1. An increase in government spending increases the supply of money in our economy.
2. An appropriate fiscal policy response when aggregate demand is growing at a slower rate than aggregate supply is to cut taxes.
3. If real equilibrium GDP is above potential GDP, expansionary fiscal policy should be pursued.
1. FALSE
2. TRUE
3. FALSE
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The table shows the demand and supply schedules for jeans
A) At $60 a pair, there is a shortage of jeans and the price will fall. B) At $60 a pair, there is a surplus of jeans and the price will rise. C) At $40 a pair, there is a shortage of jeans and the price will rise. D) At $40 a pair, there is a shortage of jeans and the price will fall.
Which of the following statements is FALSE regarding the definition of poverty?
A) A threshold income level is used to define poverty. B) Adjustments to the poverty level are made on the basis of changes in the Consumer Price Index. C) Real incomes in the United States have been growing at a compounded annual rate of almost 2 percent per capita. D) Poverty cannot be defined in relative terms.