Answer the next question using the following budget information for a hypothetical economy. Assume that all budget surpluses are used to pay down the public debt. Government SpendingTax RevenuesGDPYear 1$450$425$2,000Year 25004503,000Year 36005004,000Year 46406205,000Year 56805804,800Year 66006205,000A budget surplus occurred in
A. Year 2.
B. Year 3.
C. Year 4.
D. Year 6.
Answer: D
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According to the rational expectations school, when monetary policy makers do exactly what is expected of them, their efforts to stimulate the economy will have no effect on employment
a. True b. False Indicate whether the statement is true or false
The Gramm-Leach-Bliley Act (GLBA), passed by the U.S. Congress in the year 1999, allows commercial banks to:
a. operate in all foreign countries. b. open new branches in Cuba. c. expand their business into other areas of finance, including insurance and selling securities. d. raise reserve requirements for other financial institutions. e. eliminate unit banking.
Cartel members have an incentive to cheat on cartel agreements because
a. the cartel cannot maximize profits. b. the cartel price is the competitive price. c. the demand curve for the firm is more elastic than the cartel's demand curve. d. the industry profit would be higher under competitive conditions.
If a company dumps pollution in the water and fishermen are hurt and if transactions costs are prohibitively high and efficiency is the most important criteria,
A. the company should be made liable for the damage. B. the company should be taxed enough so the government can keep the river clean. C. liability should be placed on the group that has the least cost of solving the problem. D. the company should be allowed to pollute because a river is not private property.