31) An increase in taxes is likely to: A) increase the real interest rate. B) result in an increase in aggregate supply. C) crowd in investment spending by businesses. D) increase the demand for money.
31) An increase in taxes is likely to:
A) increase the real interest rate.
B) result in an increase in
C) crowd in investment spending by businesses.
D) increase the demand for money.
Recall Application 3, "Increasing Health-Care Expenditures and Crowding Out," to answer the following questions:
32) According to the application, health-care expenditures as a proportion of
A) 5.2% -15.4%.
B) 23.9%-51.3%.
C) 2.3% - 5.2 %.
D) 5.4% - 9.2%.
33) According to the application, the increase in the share of health-care spending to GDP from the 1950s to 2000 is due to:
A) higher life expectancy.
B) a higher relative price of health-care relative to other goods and services.
C) a larger elderly population.
D) All of the above are correct.
34) According to the application, as individuals become richer, sooner or later they will substitute spending away from ________ and into ________.
A) consumer durables; increasing their lifespan
B) consumer durables; stocks of HMO's
C) less expensive health care; more expensive health care
D) nursing homes; retirement communities
35) According to the application, as individuals increase spending on health-care:
A) investment spending decreases causing a decline in living standards in the long-run.
B) government spending decreases causing a decline in living standards in the long-run.
C) government spending increases further causing a rise in living standards in the long-run.
D) investment spending increases causing a rise in living standards in the long-run.
36) We can infer from the application that the increase in living standards today may cause a drop in living standards in the long run.
37) If the economy is at full employment equilibrium, an expansionary
38) Money is neutral both in the short run and in the long run.
39) If the economy is at full employment equilibrium, an increase in the money supply will cause a higher level of output and an increase in the price level.
40) In the short run, it is likely that an increase in the money supply will cause both output and the price level to increase.
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