If the aggregate supply curve is flat,
a. expansionary fiscal or monetary policy will cause a good deal of inflation with little increase in real output.
b. expansionary fiscal or monetary policy will buy large gains in real output at low cost in terms of inflation.
c. a contractionary stabilization policy is an effective way to reduce inflation.
d. decreasing the income tax will not shift aggregate demand.
b
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How do fears of future economic problems affect GDP?
(A) Government will spend less and save money for a future economic contraction; GDP will be reduced. (B) Consumers will spend more money in the short term to prevent future economic problems; GDP will be pushed up. (C) Businesses will invest more money in the short term to ensure higher profits in the future; GDP will be pushed up. (D) Consumers will spend less and save money in case future economic problems affect them; GDP will be reduced.
About four out of five millionaires in the United States earned their money rather than inherited it
a. True b. False Indicate whether the statement is true or false