An economy produces capital goods and consumer goods. This economy is operating at a point on its production possibility frontier associated with a small amount of capital goods and a large amount of consumer goods. This is most likely to be a
A. country with a free market.
B. "poor" country because such a nation has difficulty devoting many resources to the production of capital goods.
C. "rich" country because such a nation can afford to sacrifice.
D. country with a command economy.
Answer: B
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Refer to the figure above. What is the market-wide consumer surplus when the market price of wine is $9?
A) $180,000 B) $90,000 C) $60,000 D) $210,000
If buyers were required to pay the federal excise tax on gasoline directly to the government, the demand curve for gasoline would shift up
Indicate whether the statement is true or false
The automatic budget deficits and budget surpluses that occur in the federal budget over the business cycle
A) destabilize the economy. B) stabilize the economy. C) decrease potential GDP. D) increase potential GDP.
Expansionary fiscal policy is used to
A) combat inflation. B) combat recessions. C) encourage private saving. D) make businesses more efficient.