Fiscal policy is defined as
A. the use of the taxing power of the government to redistribute wealth in a socially acceptable manner.
B. the design of a tax system to transfer income from large corporations to the poor.
C. the use of Congressional power to pursue social and political goals.
D. the discretionary changing of government expenditures or taxes to achieve macroeconomic goals.
Answer: D
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If demand is unit elastic, then a 10 percent increase in price will lead to a 10 percent drop in quantity demanded.
Answer the following statement true (T) or false (F)
Which of the following scenarios is an example of the tragedy of the commons?
a. Extensive fishing of Bluefin Tuna in the Atlantic Ocean b. Overuse of a private swimming pool for recreation c. High demand for burgers from Burger King d. High demand for online movie streaming on Netflix
After an oil price shock, which of the following would move unemployment back towards its natural rate?
a. the Fed sells bonds b. the government raises taxes c. the government increases expenditures d. All of the above are correct.
Which of the following Gauss-Markov assumptions is violated by the linear probability model?
A. The assumption of constant variance of the error term. B. The assumption of zero conditional mean of the error term. C. The assumption of no exact linear relationship among independent variables. D. The assumption that none of the independent variables are constants.