A $10 billion reduction in taxes increases Real GDP by $60 billion. Assuming a constant price level, what does the tax multiplier equal?

Assume the Congress approves increased drilling for oil in the U.S. to address the current energy shortage. People who are in favor of this policy argue that, ceteris paribus, this would cause:

A) an increase in the equilibrium price and quantity of oil. B) a decrease in the equilibrium price and quantity of oil. C) a decrease in equilibrium price and increase in the equilibrium quantity of oil. D) an increase in equilibrium price and a decrease in the equilibrium quantity of oil.

Consumers who will pay high prices to be among the first to own certain new products are called

A) gullible. B) naive consumers. C) savvy consumers. D) early adopters.