Suppose inflation is a threat because the current aggregate demand curve will increase by $600 billion at any price level. If the marginal propensity to consume is 0.75, federal policymakers can follow Keynesian economics and restrain inflation by:
a. decreasing tax revenues by $600 billion.
b. decreasing government spending by $200 billion.
c. increasing tax revenues by $200 billion.
d. increasing government purchases by $150 billion.
c
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When society produces the combination of goods and services on the PPF that it values the most highly, society has
A) achieved only production efficiency and definitely not allocative efficiency. B) achieved only allocative efficiency definitely not production efficiency. C) achieved both production efficiency and allocative efficiency. D) achieved a free lunch. E) perhaps achieved production efficiency and has perhaps achieved allocative efficiency.
When you see a preview of a coming movie at the movie theater, this is
A) informational advertising. B) direct market advertising. C) indirect market advertising. D) persuasive advertising.