In the United States since 1970, how has the use of credit cards affected the demand for M1 as a percentage of GDP?
What will be an ideal response?
Since 1970, credit cards have become more widespread. As a result, the demand for M1 as a percentage of real GDP has decreased.
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A local government currently has a tax base of $4 million and a tax rate of 5 percent. If the tax rate is increased to 6 percent, the tax base will decrease to $3.5 million. If the goal is to maximize tax revenues the tax rate should be
A) lowered below 5 percent. B) kept at 5 percent. C) raised to 6 percent. D) abolished.
Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary