You win a lottery that pays $50,000 each year for the next 10 years beginning next year. How much are your winnings worth today?

Suppose fiscal policy makers pass a budget that increases taxes in the current period and are expected to raise taxes in the future. Use the IS-LM model to illustrate graphically and explain the effects of this policy on current output and the current interest rate

What will be an ideal response?

At levels of output close to full employment, the aggregate supply curve is probably

a. very flat. b. very steep. c. sloped downward. d. perfectly elastic.