How can the federal government use discretionary fiscal policy to stimulate the economy?
What will be an ideal response?
If the economy has a recessionary gap, the government can increase its expenditure or lower taxes to increase aggregate demand and move the economy back toward potential GDP.
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Refer to the scenario above. Which of the following will happen in this case?
A) Neither of them will make any money. B) Only Elly will make money. C) Elly will trust, but her employee will defect. D) Elly will trust, and her employee will cooperate.
The economy of Carl’s country is growing at a rate of 1.75 percent per year. The economy of Miska’s country is growing at a rate of 3 percent per year. Approximately how much longer than Miska’s country will it take for the economy of Carl’s country to double?
a. 1.25 years b. 16.7 years c. 56 years d. 40 years
An economy has two workers, Paula and Ricardo. Every day they work, Paula can produce 4 computers or 16 shirts, and Ricardo can produce 6 computers or 12 shirts. To maximize total output, Paula should specialize in producing ________ while Ricardo should specialize in producing ________.
A. shirts; shirts B. computers; shirts C. computers; computers D. shirts; computers
Use the following general linear demand relation:Qd = 100 - 5P + 0.004 M - 5PR where P is the price of good X, M is income, and PR is the price of a related good, R.What is the demand function when M = $50,000 and PR = $10?
A. Qd = 100 - 5P B. Qd = 350 - 5P C. Qd = 300 - 5P D. Qd = 200 - 5P E. none of the above