Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point E necessarily represents
A. only motorcycles being produced.
B. overallocation of resources.
C. an impossible production point.
D. technological advancement.
Answer: A
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The ________ of the 1968 tax surcharge led to the prominence of the developer of the permanent-income hypothesis that predicted it, ________
A) success, Walter Heller B) success, Milton Friedman C) failure, Walter Heller D) failure, Milton Friedman
Contractionary fiscal policy would be most effective in decreasing inflation when
a. the marginal propensity to consume low. b. investment spending is insensitive to interest rates. c. the economy has a high marginal tax rate. d. investment spending is sensitive to interest rates.
Special interest group Q receives a 1/10,000th slice of the economic pie. Its net benefit from either an economic growth policy or a transfer policy is $50,000. In order for group Q to be indifferent between the two policies, the economic growth policy would have to make the size of the economic pie (Real GDP) grow by _________________. This type of analysis is used to show that special interest
groups tend press government for ______________ instead of ________________. A) $50,000,000; economic growth; transfers B) $500,000; transfers; economic growth C) $500,000,000; transfers; economic growth D) $5,000,000; transfers; economic growth E) none of the above
A monopolistic firm will shut down if
A) P < ATC for every level of output. B) P > ATC for every level of output. C) P > AVC for every level of output. D) P < AVC for every level of output.