Which of the following fiscal policy changes would be the most expansionary?
A. A $20 billion tax cut and $20 billion increase in government purchases
B. A $40 billion tax cut
C. A $10 billion tax cut and $30 billion increase in government purchases
D. A $40 billion increase in government purchases
Answer: D
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Which of the following is most closely related to the "fair results" approach to fairness?
A) efficient resource use B) having an equal income distribution C) voluntary exchange D) the command system of allocating resources E) price hikes in a natural disaster
If the average duration of unemployment is increasing, real GDP is most likely
A) beginning to rise. B) remaining stable. C) getting ready to decrease. D) already decreasing.
Samuelson and Solow, in their 1960 study of the Phillips curve as it applies to the U.S. experience, argued that there was a tradeoff between inflation and unemployment. Later experience showed their analysis to be
A) entirely correct in every situation. B) generally correct, but it could not explain stagflation. C) wholly wrong in every situation. D) in general agreement with rational expectations theory. E) capable of explaining stagflation, but not other economic scenarios.
Moe divides his time between studying Physics and studying Economics. His production possibilities curve for his final grade in each class is shown in the accompanying figure.
Which of the following is true?
A. Moe has a comparative advantage in economics. B. Moe has an absolute advantage in economics. C. Moe's opportunity cost of studying for each subject is increasing. D. Moe has a comparative advantage in physics.