If the economy in the graph shown is at point D, and the government wished to bring the economy back to its long-run equilibrium, it might:
A. increase government spending.
B. decrease income taxes.
C. increase corporate income taxes.
D. All of these would bring the economy back to potential GDP.
C. increase corporate income taxes.
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Classical macroeconomists argue that the short-run Phillips curve ________ represent a usable trade-off for policymakers because ________
A) does; people have rational expectations B) does; people do not have rational expectations C) does not; people do not have rational expectations D) does not; people have rational expectations
According to the law of diminishing marginal utility, the fifth pair of gloves that Mary receives for Christmas makes her
a. as happy as she was while receiving the first pair b. less happy than she was while receiving the first pair c. more happy than she was while receiving the first pair d. consider that fifth pair as having zero marginal utility e. total utility decrease