The balanced-budget multiplier is equal to
A. the percentage increase in taxes.
B. the percentage increase in government expenditures.
C. one.
D. the reciprocal of the increase in government expenditures.
Answer: C
You might also like to view...
In the figure above, with the tariff American consumers ________ million shirts per year
A) 40 B) 48 C) 32 D) 16
Refer to the table below. If Fresh Laundry is currently producing 2 quality units, to maximize profit, Fresh Laundry should ________ the number of quality units as the current quality marginal revenue is ________ than its marginal cost.
Fresh Laundry is a firm that produces laundry detergent. The table above summarizes Fresh Laundry's product quality marginal revenue and marginal cost at various quality levels.
A) increase; greater
B) decrease; greater
C) increase; less
D) decrease; less
Which of the following is a TRUE statement about stock markets?
A) Economists can make above-average profits in the stock market because of their specialized knowledge of economics. B) It is always better to buy growth stocks than the older and more stable blue-chip stocks. C) The stock market on average over time is random and totally unrelated to the performance of the economy. D) It is illegal for a friend of a corporate executive to make large profits in the stock market by using his inside information.
John is trying to decide whether to expand his business or not. If he continues his business as it is, with no expansion, there is a 50 percent chance he will earn $100,000 and a 50 percent chance he will earn $300,000. If he does expand, there is a 30 percent chance he will earn $100,000, a 30 percent chance he will earn $300,000 and a 40 percent chance he will earn $500,000. It will cost him $150,000 to expand. If John were to expand, which of the following is true?
A. John's expected earnings are $50,000 less than if he didn't expand. B. John can expect to earn $120,000 more by expanding, but that is less than the cost of expansion, $150,000. C. John can expect to earn $120,000 more by expanding and therefore made the most profitable decision. D. All of these statements are true.