The purpose of fiscal policy should be to
A. balance the budget to be fiscally responsible.
B. balance aggregate supply and aggregate demand.
C. keep taxes low to keep voters happy.
D. minimize government spending to avoid wasting money.
Answer: B
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The Commons Problem could be addressed by
A) charging a fee proportional to the use of the common property. B) charging a fee unrelated to the use of the common property. C) charging no fee. D) prohibiting the use of the common property.
Countries with higher rates of saving
A) experience lower growth rates in the future. B) have a large population. C) have a greater number of poor people. D) have higher rates of growth.
Continued inflation occurs
A) if there is a sustained increase in the price level. B) only if there is a sustained increase in the price of every good and service. C) only if there is a sustained increase in the price of every good and service by the same dollar amount. D) only if there is a sustained increase in the price of every good and service by the same percentage.
An economy in which output has decreased and prices have decreased would suggest a:
A. decrease in short-run aggregate supply. B. increase in aggregate demand. C. increase in short-run aggregate supply. D. decrease in aggregate demand.