If there's demand-pull inflation in the economy, then government policy should
a. increase taxes and cut spending, which would shift AD to the left
b. increase taxes and spending, which would shift AD to the left
c. decrease taxes and spending, which would shift AD to the left
d. decrease taxes and increase spending, which would shift AD to the right
e. increase taxes and cut its spending, which would shift AS to the left
A
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"A perfectly competitive firm is called a price maker because all the firms together must make the market price." Is the previous statement correct or incorrect? Briefly explain your answer
What will be an ideal response?
Pirates have been intensely attacking ships off the shore of Somalia this year. Boat owners have reportedly coughed up more than $30 million in ransom and insurance premiums have shot up. Why would insurance premiums increase dramatically?
I. Because the probability of pirate attack has increased II. Because consumers' willingness to pay for insurance has increased because of these attacks III. Because insurance claims have increased A) I only B) I and III only C) III only D) I, II, and III