"Leaning against the wind" is exemplified by a(n)
a. tax increase when there is a recession.
b. increase in the money supply when there is a recession.
c. decrease in government expenditures when there is a recession.
d. All of the above are correct.
b
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Suppose there are two small island countries: Avarice, which is populated by people who are completely self-interested, and Altruism, which is populated by people who have adopted social norms of generosity and cooperation. Commitment problems will be:
A. largely avoided on both islands. B. largely avoided in Altruism, but prevalent in Avarice. C. largely avoided in Avarice, but prevalent in Altruism. D. prevalent on both islands.
The primary objective of a cartel is to:
A) maximize the amount of profit received by each member of the organization. B) maximize the joint profits of the members of the organization. C) ensure each member of the organization some minimum amount of profit. D) maximize the average profits of the members of the organization.
In a circular-flow diagram, the saving and taxation "pipes" are carrying
A) injections to firms. B) injections to households. C) leakages from firms. D) leakages from households.
A simplified representation of the real world that is used to explain economic phenomena is a(n)
A) viewpoint. B) model. C) assumption. D) implication.