A "liberal" would most likely argue in favor of
a. tax increases when fiscal stimulus is necessary, and spending cuts when fiscal restraint is necessary.
b. tax cuts when fiscal restraint is necessary, and spending cuts when fiscal stimulus is necessary.
c. tax cuts when fiscal stimulus is necessary, and spending cuts when fiscal restraint is necessary.
d. spending increases when fiscal expansion is necessary, and tax increases when fiscal restraint is necessary.
d
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If the marginal product of a unit of physical capital is 10 units of output, and the product that the physical capital is used to produce is sold for $5, the value of the marginal product of physical capital equals:
A) $2. B) $10. C) $20. D) $50.
Rational ignorance
A) refers to attempts by special interests to use government action to make themselves better off at the expense of others. B) explains the Arrow impossibility theorem. C) helps to explain why rent seeking by special interest groups occurs. D) explains why consumers ignore sunk costs when they vote.
An increase in government purchases must always be accompanied by an increase in autonomous net taxes to boost aggregate demand
a. True b. False Indicate whether the statement is true or false
The basic difference between macroeconomics and microeconomics is:
a. microeconomics concentrates on individual markets while macroeconomics focuses primarily on international trade. b. microeconomics concentrates on the behavior of individual consumers while macroeconomics focuses on the behavior of firms. c. microeconomics concentrates on the behavior of individual consumers and firms while macroeconomics focuses on the performance of the entire economy. d. microeconomics explores the causes of inflation while macroeconomics focuses on the causes of unemployment.