Suppose the government purposely changes the economy's cyclically adjusted budget from a deficit of 3 percent of real GDP to a surplus of 1 percent of real GDP. The government is engaging in a(n):
A. expansionary fiscal policy.
B. contractionary fiscal policy.
C. neutral fiscal policy.
D. high-interest-rate policy.
B. contractionary fiscal policy.
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The figure above shows Sam's budget line. Why will Sam not purchase 36 gallons of gasoline and 4 pounds of coffee?
A) because he does not like this combination B) because this combination does not contain enough coffee to satisfy him C) because this combination contains more gasoline than his gasoline tank will hold D) because he cannot afford this combination
Prior to the industrial revolution
A. economic growth was only 1 percent per year. B. life remained the same from one generation to the next. C. most workers were craftsmen, such as millers, carpenters, and tailors. D. there were very few rich people, but there were very few poor people.
Whether a subsidy for a certain good is given to a demander or supplier is irrelevant because
a. in either case, the price that the demander has to pay will decrease; while the price the supplier receives will increase b. in either case, the price that the demander has to pay will increase; while the price the supplier receives will decrease c. either situation will create excess demand d. either situation will create excess supply e. none of these are correct
Monopoly firms may lead to higher costs than perfectly competitive firms.
Answer the following statement true (T) or false (F)