Countercyclical fiscal policy can
a. only be employed in reaction to an existing recession
b. only be employed in reaction to an existing boom
c. be employed to prevent a potential recession or boom or in reaction to an existing recession or boom
d. only be employed to prevent a potential boom
e. only be employed to prevent a potential recession
C
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Suppose y = k1/2, total factor productivity is constant and equal to 1, s = 0.40, and d = 0.10. When the economy reaches the steady state, the capital-labor ratio is ________ of capital per worker
A) $2 B) $4 C) $8 D) $16
The value of cross-price elasticity of demand between orange soda and grape soda is
a. negative b. positive c. 0 d. between -1 and 0 e. less than -1
Rose, who grows geraniums to sell, is currently producing a level of output at which her marginal cost equals her average variable cost. What must be true about Rose's average total cost at this level of output? a. It is at a minimum
b. It is at a maximum. c. It is falling with increased output. d. It is equal to average variable cost.
The Fed is institutionally independent. A major advantage of this is that monetary policy
a. is subject to regular congressional scrutiny. b. will often offset fiscal policy. c. is not controlled by politicians. d. is usually coordinated with fiscal policy.