Expansionary fiscal policy is used to
A) combat inflation.
B) combat recessions.
C) encourage private saving.
D) make businesses more efficient.
Answer: B) combat recessions.
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A buyer is willing to buy 10 units of a good at a maximum price of $10 per unit. The reservation value of the buyer in this case is:
A) $1. B) $10. C) $20. D) $100.
An individual whose attitude toward risk is illustrated in Figure 5.1 is
A) risk averse. B) risk loving. C) risk neutral. D) None of the above is necessarily correct.
Transfer prices should be set to so
A) to maximize profits for only one unit in a multi-unit firm. B) allow arbitrage with the external market place. C) to maximize profits for the overall firm. D) none of these choices.
Which of the following is a reason behind income being considered a tax base? a. It is earned
b. It is subsidized. c. It is taxed. d. It is used to buy goods and services.