Refer to the graph below. The movement from point 1 to point 2 is stimulated by a disequilibrium in which there is domestic ________ and ________
A) overemployment; trade surplus
B) unemployment; trade surplus
C) overemployment; trade deficit
D) unemployment; trade deficit
E) inflation; unemployment
A
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Answer the next question using the following budget information for a hypothetical economy. All data are in billions of dollars. Government SpendingTax RevenuesGDPYear 1$800$825$4,000Year 28508504,200Year 39008754,350Year 49509004,500Year 51,0009254,600The budget deficit was $75 billion in
A. Year 2. B. Year 3. C. Year 4. D. Year 5.
On a graph of the consumption function, where the consumption function crosses the 45 degree line,
A) there is no saving and no dissaving. B) disposable income is zero. C) the maximum level of disposable income is earned. D) there are no tax payments. E) induced consumption equals zero.
In a monopolistically competitive market with Dixit-Stiglitz preferences, the number of firms in the differentiated product market falls as goods in that market become less substitutable.
Answer the following statement true (T) or false (F)
Which of the following government actions is appropriate in a market with an external benefit?
A) taxes B) vouchers C) marketable permits D) setting a tax equal to the transactions costs E) price ceiling