"Expansionary fiscal policy is needed to increase Real GDP --- at least in the short run." The economist who said this most likely believes that
A) the tax multiplier is larger than the government spending multiplier.
B) the AS curve is vertical.
C) there will be a great deal of crowding out connected with a rise in government spending.
D) the AS curve is upward-sloping.
E) c and d
D
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Refer to Figure 4.2. The substitution effect on the quantity of clothing purchased is:
A) the change from C3 to C1. B) the change from C3 to C2. C) the change from C2 to C1. D) the change from C1 to C2. E) none of the above
An increasing-cost industry is so named because of the positive slope of which curve?
A) Each firm's short-run average cost curve B) Each firm's short-run marginal cost curve C) Each firm's long-run average cost curve D) Each firm's long-run marginal cost curve E) The industry's long-run supply curve
A pollution tax is:
a. a positive externality used to offset a negative one b. a price per unit of discharge of pollution c. a tax on pollution control equipment d. itself a form of negative externality
As the result of specialization and trade, according to the law of comparative advantage, total output will
a. decline because specialization is costly. b. rise only when there is an accompanying decline in the total output of one's trading partners. c. rise if a nation is a net exporter and fall if the nation is a net importer of goods and services. d. increase since resources will be better directed toward their highest-valued use.