If the expenditure multiplier is 2, and households save the extra income which they receive from a £1bn tax cut, then we expect the change in national income to be 0 -£0.5bn +2bn +£0.5bn Which of these statements reflects the assumptions which New Classical economists typically make about aggregate supply? Both long-run and short-run AS curves slope upwards, but the short-run curve is steeper than the long-run curve There is a single AS curve, which is horizontal when there is unemployment, and vertical when there is full employment The short-run AS curve is horizontal, but the long-run AS curve is vertical The long run AS curve is vertical, and the short run AS is upward sloping Cost push inflation occurs when The government increases its budget deficit Anticipating inflation, households accelerate purchases The price of commodities used in production increases Monetary financial institutions increase their liquidity ratio

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question
not use ai please
If the expenditure multiplier is 2, and households save the extra income which they receive from a £1bn tax cut, then we
expect the change in national income to be
0
-£0.5bn
+2bn
+£0.5bn
Which of these statements reflects the assumptions which New Classical economists typically make about aggregate
supply?
Both long-run and short-run AS curves slope upwards, but the short-run curve is steeper than the long-run curve
There is a single AS curve, which is horizontal when there is unemployment, and vertical when there is full employment
The short-run AS curve is horizontal, but the long-run AS curve is vertical
The long run AS curve is vertical, and the short run AS is upward sloping
Cost push inflation occurs when
The government increases its budget deficit
Anticipating inflation, households accelerate purchases
The price of commodities used in production increases
Monetary financial institutions increase their liquidity ratio
Transcribed Image Text:If the expenditure multiplier is 2, and households save the extra income which they receive from a £1bn tax cut, then we expect the change in national income to be 0 -£0.5bn +2bn +£0.5bn Which of these statements reflects the assumptions which New Classical economists typically make about aggregate supply? Both long-run and short-run AS curves slope upwards, but the short-run curve is steeper than the long-run curve There is a single AS curve, which is horizontal when there is unemployment, and vertical when there is full employment The short-run AS curve is horizontal, but the long-run AS curve is vertical The long run AS curve is vertical, and the short run AS is upward sloping Cost push inflation occurs when The government increases its budget deficit Anticipating inflation, households accelerate purchases The price of commodities used in production increases Monetary financial institutions increase their liquidity ratio
Expert Solution
steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education