Which of the following statements is false?
A. Critics feel that wage and price controls interfere with the price mechanism.
B. Sweden has one of the world's most equal distributions of income, but also has a relatively low standard of living.
C. In the former Soviet Union, most of the crops were produced on collective farms.
D. The price system is based on supply and demand.
B. Sweden has one of the world's most equal distributions of income, but also has a relatively low standard of living.
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Figure 10-4
In Figure 10-4, if full employment occurs at 5,000 and the price level is currently 130, then we can expect the
a.
aggregate supply curve to shift to the left until a new equilibrium is established at an output level of 4,000.
b.
aggregate demand curve to shift to the right until a new equilibrium is established at an output level of 6,000.
c.
the price level to fall to 110.
d.
aggregate demand to shift to the left and aggregate supply to shift to the right until the price level reaches 130.
Which of the following fiscal policy changes would be the most expansionary?
A. A $40 billion increase in government spending B. A $20 billion tax cut and $20 billion increase in government spending C. A $10 billion tax cut and $30 billion increase in government spending D. A $40 billion tax cut