When there is excess aggregate demand, the appropriate fiscal policy would be for the government to
A. Increase the public debt.
B. Make budget deficits larger.
C. Make budget surpluses larger.
D. Make budget surpluses smaller.
Answer: C
You might also like to view...
All of the following would be considered explicit costs of operating a business except
A) the rental value of equipment the company owns and uses for its own production. B) advertising expenses. C) utility expenses. D) the cost of raw materials used in production.
A competitive market economy is unlikely to provide an efficient quantity of some public goods because:
a. only the government has the vast resources necessary to produce public goods. b. the nature of public goods makes it difficult for producers to withhold them from nonpaying consumers. c. the technology involved in the production of public goods makes it difficult for private firms to produce them even though, once produced, they could be marketed efficiently. d. private production of public goods generally results in a large amount of profit, which is difficult for a firm to effectively pay out to shareholders.
In the last few decades, tariffs have:
A. risen by more than 20 percent in developing countries. B. fallen by more than 20 percent in developing countries. C. risen more in developing nations than in developed countries. D. risen more in developed nations than in developing countries.
In a graph of a typical firm's AFC, ATC, and AVC curves, the
A. AVC curve crosses the MC curve at the point where the MC is at its minimum. B. distance between the ATC curve and the AVC curve equals the AFC. C. distance between the AVC curve and the AFC curve equals the ATC. D. AVC curve lies above the ATC curve.