Whenever government spending is a substitute for private spending
A) interest rates will rise.
B) the Ricardian equivalence theorem holds.
C) the effects of expansionary fiscal policy are dampened.
D) there is a direct multiplier effect.
C
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To close an expansionary gap, the Fed ________ interest rates which ________ aggregate spending and ________ short-run equilibrium output.
A. raises; decreases; increases B. raises; decreases; decreases C. raises; increases; increases D. reduces; increases; decreases
The slope of a curved line can be approximated by
A) the average of the variable measured along the y-axis divided by the average of the variable measured along the x-axis. B) the inverse of the straight-line method. C) the average of the variable measured along the x-axis divided by the average of the variable measured along the y-axis. D) the slope across an arc from one point on the curve to another point on the curve.
Efficient production of a public good requires a. that individuals pay for such goods according to benefits received
b. that each individual's MRS be equal to the RPT of public goods for private goods. c. that the sum of individuals' MRSs be equal to the RPT of public goods for private goods. d. that governments produce at the low point of the average cost curve for the public good.
In the following situation, the tax system is Taxable income $1,000 $2,000 $4,000 $8,000 Tax payments $10 $30 $90 $270
a. progressive throughout all levels of income b. progressive between $1,000 and $2,000 of income but regressive above $2,000 c. regressive throughout all levels of income d. regressive between $1,000 and $2,000 of income but progressive above $2,000 e. proportional throughout all levels of income