If the economy is in an inflationary gap, and the government attempts to balance the budget, the effect will be to
a. counteract inflation.
b. reduce the trade deficit.
c. continue inflationary pressures.
d. increase unemployment.
c
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The best example of a good sold in a monopolistically competitive market is
A) pizza. B) the local newspaper. C) sewer services. D) peaches.
An individual's demand curve for a good is derived by
a. varying the income level and observing the resulting total utility derived from both goods b. varying the price of one good and observing the resulting quantities demanded of the other good c. varying the prices of both goods and observing the changes in quantities demanded of both goods d. shifting the budget line to the left and calculating the loss in total utility e. varying the price of one good and observing the resulting quantities demanded of that good
The figure above portrays a total revenue curve for a perfectly competitive firm. Curve A is straight because the firm
A) is a price taker. B) faces constant returns to scale. C) wants to maximize its profits. D) has perfect information.
Ariana withdrew $400,000 out of her personal savings account and used it to start her new Internet cafe. The savings account pays 3 percent interest per year. During the first year of her business, Ariana sold 2,000 cups of coffee for $2.50 per cup and 4,000 hours of Internet time, also at $2.50 per hour. During the first year, the business made monetary outlays of $9,000 . You may assume that
there is no opportunity cost to Ariana's time. Ariana's economic profit for the year was a. $-394,000. b. $-6,000. c. $3,000. d. $6,000.