Describe the differences (in sign and relative magnitude) between the government purchases multiplier and the tax multiplier
What will be an ideal response?
First, changes in government purchases affect GDP in the opposite direction as changes in taxes. As a result, the government purchases multiplier is positive, and the tax multiplier is negative. Second, the government purchases multiplier is larger in magnitude than the tax multiplier. This means that a dollar change in government purchases will have a larger effect on GDP as compared to a dollar change in the taxes.
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A group of firms that has entered into a collusive agreement to restrict output and increase prices and profits is called
A) a compliance. B) a cartel. C) an oligopoly. D) a duopoly.
Identify whether each of the following transactions will take place in the factor market or in the product market
a. Graciela buys a Tesla Motors Model X. b. Lashan works 60 hours a week at a law firm. c. Tito sells his family's farmland to a housing developer. d. Tesla Motors increases employment at its Fremont, California plant.
One way to achieve efficiency in a market with a negative externality is
a. to raise the market demand curve to the position of the marginal social cost curve b. to apply the Coase theorem c. to lower the marginal social cost curve to the position of the market supply curve d. to eliminate all side payments e. to raise the market supply curve to the position of the marginal social cost curve
Which of the following mathematical expressions represents the equation of a straight line with a slope of zero at all points on a graph with Y on the vertical axis and X on the horizontal axis?
a. Y = a + X b. X = bY c. X = a d. Y = a