What is the? short-run effect of increased deficit spending on an economy experiencing a recessionary? gap?
a. Aggregate demand will increase, creating an inflationary gap.
b. Aggregate demand decreases, and the gap widens.
c. Aggregate demand increases and the gap closes.
d. None of the above
Answer: C. Aggregate demand increases, and the gap closes.
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Both the principles of rivalry and mutual excludability apply for club goods
a. True b. False Indicate whether the statement is true or false
If every worker earns the same wage rate, then
a. MPP = MRP for all workers b. the firm cannot earn a profit c. every worker except for the last hired generates an MRP equal to the wage rate d. only the last worker hired generates an MRP equal to the wage rate e. all workers hired generate an MRP equal to the wage rate
According to the Laffer curve, when the tax rate is 100 percent, tax revenue will be
a. 0 b. at a maximum c. the same as they would be at a 50 percent tax rate d. greater than they would be at a 50 percent tax rate e. the same as they would be at a 20 percent tax rate
Graphically, an increase in the market demand for coffee is shown by:
a. a rightward movement along the market demand curve for coffee. b. a rightward shift in the market demand curve for coffee c. a leftward movement along the market demand curve for coffee. d. a leftward shift in the market demand curve for coffee.