John Maynard Keynes believed that a recession was caused entirely by
A. inadequate aggregate supply.
B. inadequate aggregate demand.
C. too much inflation.
D. too much government intervention.
B. inadequate aggregate demand.
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If an economy is producing a level of output which is higher than the equilibrium level, planned expenditures ________ total output and ________ goods and services are being produced than are being demanded
A) exceed; more B) exceed; fewer C) are less than; fewer D) are less than; more
We know that among the current account, the capital and financial account, and the official settlements account that the
A) current account plus the capital and financial account equals zero. B) current account plus the capital and financial account plus the official settlements account must sum to 100. C) current account is always larger than the capital and financial and official settlements accounts combined. D) current account plus the capital and financial account plus the official settlements account must sum to zero. E) current and capital and financial accounts sum to zero while the official settlements account must be greater than zero.
Which of the following gives rise to a negative externality?
A) Sudden increase in the price of wheat due to a fall in supply B) Sudden increase in the demand for diamonds leading to an increase in their price C) Deforestation leading to the extinction of many species D) Globalization leading to creation of many new job opportunities
The more inelastic the demand for a product, the more the actual burden of a tax on the product will:
a. fall on sellers. b. fall on buyers. c. fall equally on both buyers and sellers. d. create a larger deadweight loss (or excess burden).