If a city decides to restrict the number of pizza parlors,
A) the price of pizza will increase.
B) pizza parlors will make higher profits.
C) total welfare will decrease.
D) All of the above.
D
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Assume that fewer businesses offer new bonds to raise investment funds when government borrowing increases interest rates. This would be an example of:
a. Ricardian equivalence. b. overestimating the tax multiplier. c. crowding out. d. increased consumption. e. the balanced-budget multiplier.
In 2010, many politicians argued that the deficit should be reduced at all costs but many economists countered that deficit reduction would be problematic given the state of the economy
a. True b. False Indicate whether the statement is true or false
Figure 11-1
In Figure 11-1, the slope of the expenditures schedule is .75 and the government wishes to achieve full employment. It should
a.
cut spending by 1,000.
b.
increase spending by 1,000.
c.
cut taxes by 1,000.
d.
increase spending by 250.
e.
cut taxes by 250.
Using the data in the graph above, calculate the firm's total profit.
