In the figure above, which of the following is true?
i. Governments coordinate economic activities of households and firms.
ii. Governments buy goods and services in goods markets.
iii. Households pay taxes directly to firms.
A) i and ii B) only i C) only iii D) ii and iii E) only ii
E
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When demand decreases and the demand curve shifts to the left, equilibrium price ________ and equilibrium quantity ________
A) increases; decreases B) decreases; increases C) decreases; decreases D) increases; increases
The economic theory of government predicts elected officials at the federal level will have incentives to act in ways that
A) cause inflation. B) increase uncertainty and the instability of total demand. C) secure short-term economic gains with deferred costs. D) result in all of the above. E) result in none of the above because they will usually want to be reelected.