Suppose the equilibrium level of income exceeds the full employment level of income and there is high inflation. Hence, the government decides to implement a fiscal policy that will act to reduce national output and prices. This can be accomplished by:
a. increasing government spending such that aggregate expenditures are increased.
b. raising taxes and government spending by the same amount such that aggregate supply is decreased and aggregate demand is increased.
c. decreasing government spending such that aggregate demand is reduced.
d. lowering average tax rates such that aggregate supply is increased.
e. increasing transfer payments such that aggregate expenditures decline.
c
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Refer to Figure 15-17. You are a member of a student government and are asked to recommend a price for the course and you argue: "I think the college should charge a price so that it just breaks even on the course". What price should you recomme
A) $0 B) $40 C) $88 D) $150
Autonomous easing of monetary policy involves ________
A) raising interest rates and shifting the MP curve to the right B) lowering interest rates and shifting the MP curve to the left C) raising interest rates and shifting the MP curve to the left D) lowering interest rates and shifting the MP curve to the right E) none of the above