Which of the following would likely result if a constitutional amendment requires the U.S. government to balance its budget every year?
a. Fiscal spending would increase largely resulting in a higher government debt
b. Automatic stabilizers would cease to work and the severity of economic fluctuations would worsen.
c. Interest rates would become highly volatile with the increased use of discretionary monetary policies.
d. Unemployment would be below its natural rate and output would be at the potential level.
b
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As we move along a production possibilities curve and acquire larger and larger amounts of one good (e.g., guns), the sacrifices of the alternative good (e.g., butter) become larger and larger. This is an illustration of
A. the law of demand. B. the law of supply. C. decreasing opportunity costs. D. increasing opportunity costs.
Use the data in the table below to answer the following question.PriceQuantity Demanded$201218171620142412301036840644448The price elasticity of demand (based on the midpoint formula) when price decreases from $12 to $10 is
A. -1.37. B. -0.33. C. -1. D. -3.29.
Kumiko is not at her consumer equilibrium because she sees too many movies and buys too few books. As she moves toward her consumer equilibrium, her total utility from movies will ________ and her total utility from books will ________
A) decrease; decrease B) increase; decrease C) decrease; increase D) increase; increase
Which of the following represents a short-run cubic production function?
A. Q = aK3L3 + bK2L2
B. Q = AL3 + BL2 (where A = a
3, B = b
2)
C. Q = 3AL2 + 2BL (where A = a
3,B = b
2)
D. Q = AL2 + BL (where A = a
3, B = b
2)
E. all of the above