A change in government purchases has the greatest effect on the economy in the short run when _____
Fill in the blank(s) with the appropriate word(s).
the short-run aggregate supply curve is relatively flat.
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At the profit-maximizing level of output for a perfectly competitive firm, price equals marginal cost. Which of the following is also true?
A) Total revenue equals total cost. B) Marginal profit equals marginal cost. C) Average revenue equals average total cost. D) The difference between total revenue and total cost is the greatest.
Refer to Figure 6.1. Suppose the economy is originally in steady state at k*1. If the saving rate increases from s1 to s2,
A) depreciation becomes greater than investment. B) investment becomes greater than depreciation. C) investment becomes greater than saving. D) saving becomes greater than investment.
From the economist's point of view
A) wants and needs are exactly the same. B) a want is a lifesaving necessity. C) needs are objectively undefinable. D) we all have wants but only very poor people have needs.
Instead of trying to balance the budget every year, it is easier to:
A. balance the budget over the business cycle. B. allow deficit spending only in times of economic downturn. C. allow surpluses to build during times of economic booms. D. All of these statements are true.