When Brazil can generate a product using fewer labor hours and resources than the United States, an economist would say that Brazil had:
A. a comparative advantage in production of the product.
B. an absolute advantage in production of the product.
C. a higher opportunity cost of producing the product.
D. no incentive to import the product, regardless of the cost-price conditions for other products.
Answer: B
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Discretionary fiscal policy is so named because it
A) is undertaken at the order of the nation's central bank. B) involves specific changes in taxes and government spending undertaken by Congress and the president. C) occurs automatically as the nation's level of GDP changes. D) involves secret advice given by the Council of Economic Advisers to the president.
The tradeoff between current consumption and the production of capital goods also reflects a tradeoff between
A) the future production of capital goods and future consumption of goods. B) economic growth and technological change. C) satisfying today the needs of the poor and the wants of the wealthy. D) current consumption and future consumption.
State-Owned Enterprises (SOEs) can succeed when
a. they are free from political interference and can make decisions according to economic criteria b. the government is clear about the SOE's objectives and enforces the rules c. the government is ready to subsidize the SOE in bad years d. only the most crucial firms are state owned e. SOEs never succeed according to economic criteria
Tax revenues are an advantage of ________, which are not offered by command-and-control policies.
A. pollution allowances B. tradeable pollution permits C. pollution taxes D. pollution tax credits