On a short-run macro model diagram, the impact of a decrease in government purchases (G) is illustrated by
a. a downward shift of the aggregate expenditure line by the full amount of the change in G
b. an upward shift of the aggregate expenditure line followed by an equal downward shift of that line
c. a leftward shift of the money supply curve
d. a downward shift of the aggregate expenditure line by an amount less than the change in G
e. the increase in real income
D
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Which of the following are ways in which corporations can reduce their U.S. tax burdens?
A) taking advantage of deductions and credits B) shifting foreign profits to overseas subsidiaries C) deducting past losses from income tax in profitable years D) all of the above
During the Iraq War, the U.S. government continued to borrow funds and yet the interest rate was steady or slightly declined. What could explain this?
A) The U.S. crowded out private saving. B) The U.S. crowded out private borrowing. C) The supply of loanable funds increased by a greater proportion than demand increased. D) The supply of loanable funds increased by a smaller proportion than demand increased.