If consumers spend _____ of a change in their disposable income, then a tax increase of $100 would lower consumption by $70
a. 35 percent
b. 100 percent
c. 80 percent
d. 70 percent
e. 50 percent
d
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People ________ their labor supply in response to a temporary decrease in government purchases because
A) increase; current or future taxes will decrease, making them financially better off. B) decrease; current or future taxes will decrease, making them financially better off. C) decrease; current or future taxes will increase, making them financially worse off. D) increase; current or future taxes will increase, making them financially worse off.
If there was no profit effect, but there was a misperception effect in the short run, then SRAS is ____ and LRAS is ____
a. upward sloping; upward sloping b. upward sloping: vertical c. vertical; upward sloping d. vertical; vertical