Suppose the money market is in the liquidity trap and that the economy is experiencing a recessionary gap. A Keynesian economist would most likely advocate
A) expansionary monetary policy.
B) contractionary monetary policy.
C) expansionary fiscal policy.
D) contractionary fiscal policy.
C
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Use the following graph for a competitive market to answer the question below.
Assume the government imposes a $3 tax on buyers, which results in a shift of the demand curve from D1 to D2. The government's tax revenue is
A. $900. B. $2,100. C. $2,400. D. $600.
A supply schedule is a table that reports:
A) the expected excess supply in the market at different prices. B) the profits earned by producers at different levels of production. C) the different quantities of a good that producers are willing to sell at different prices. D) the different quantities of a good that producers are willing to sell at different income levels.
If you anticipate that the inflation rate is going to rise from three percent to 10 percent next year, you should
A) save your funds at a fixed rate of interest. B) borrow funds at a fixed rate of interest. C) keep your funds in your sock drawer. D) wait to buy a house until next year.
If opportunity costs are constant, then
A) the production possibilities curve does not exist. B) the production possibilities curve bows outward. C) the production possibilities curve is a negatively sloped straight line. D) factors of production must not be fully employed.