Refer to above Table 2-2. What is the increase in real GDP between years 1 and 2 at fixed year 2 prices?

Social regulation means that the government dictates the price that a firm must charge and/or the quantity that a firm must supply

a. True b. False Indicate whether the statement is true or false

If a “liberal” wanted to decrease aggregate demand, which of the following would he or she tend to favor?

A. An increase in government spending, because it will increase the size of the public sector. B. A decrease in government spending, because it keeps the public sector small. C. An increase in transfer payments, because it has a larger multiplier than tax changes. D. An increase in taxes, because it makes the public sector larger.