6 Written Questions
6 Multiple Choice Questions
- deliberate manipulation of taxes and government spending by the Congress to alter real domestic output and employment, to control inflation, and to stimulate economic growth during a particular period of time
- Change in consumption/Disposable income
- the change in government expenditures or taxes which occurs automatically as a result of existing laws
- What we spend on goods and services.
- input prices
- Change in savings/Disposable income
5 True/False Questions
Cost-push inflation → What we spend on goods and services.
Average Propensity to Consume → Consumption/Disposable income
Causes of shifts in the consumption curve → Operating costs
Stock of capital goods
Planned inventory changes
Contractionary fiscal policy → an increase in taxes or decrease in government spending or both, so that the net effect on aggregate demand is a decrease in net government spending
Instability of investment → the ratio of a change in GDP to the initial change in spending. 1/1-MPC or 1/MPS