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 ga
C
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What can economists conclude if they observe an increase in real GDP?
A) The price level must have fallen. B) The real output of final goods and services must have risen. C) National welfare must have risen. D) Nominal GDP must have risen. E) All of the above.
Many of the Founding Fathers considered the emancipation of slaves to be
(a) a necessary evil in overcoming the British during the war. (b) less important than the issues of whether blacks should be prevented from coming to the United States and whether freed slaves should be deported. (c) paramount in establishing the new nation on a solid ideological foundation. (d) a states' rights issue.
The Exclusive Gift Company has a monopoly over the sale of gold hula hoops. This company is currently pricing and producing where marginal revenue is equal to marginal cost. It is selling 50 gold hula hoops at a price of $5,000 each. Total costs for the company are $300,000 of which fixed costs are $100,000. You are hired as an economic consultant to this company. You should advise this monopolist to
A. produce in the short run and expand capacity in the long run. B. shut down in the short run but expand capacity in the long run if conditions do not change. C. produce in the short run but exit the industry in the long run if conditions do not change. D. shut down in the short run and exit the industry in the long run.
When it comes to public goods, it is important to remember
A. all goods provided by the government are public goods. B. the free rider problem is difficult to overcome, but the drop-in-the-bucket problem is not. C. that government intervention necessarily solves the market failure. D. only one level of output can be realized, and consumers are willing to pay different amounts for that level.