Suppose the government increases lump-sum taxes. This causes
A) consumption spending to decrease and spending on imports to increase. The effect on aggregate demand depends on whether domestic spending or spending on imports decreased the most.
B) disposable income to decrease, which causes consumption spending to decrease and aggregate demand to decrease.
C) government spending to decrease, which causes aggregate demand to decrease.
D) disposable income to decrease, which causes aggregate supply to decrease.
B
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Working conditions for clothing workers in Bangladesh are very poor. If countries refuse to buy clothing from Bangladesh in order to encourage change, the effect is likely to be that
A) firms will be forced to comply and workers will be better off. B) firms will refuse to comply, but workers will be better off. C) firms will try to comply and workers will be worse off. D) firms will try to comply and workers will be better off. E) regardless of how firms respond, workers will be better off.
Which of the following factors affecting decision-making is studied by Behavioral Game Theory?
A) psychological biases B) limited power of calculation C) weather forecast D) A and B are correct