In addition to making the automatic stabilizers more effective, discretionary fiscal policy could fight a recession by (1) _________; (2) __________; and (3) _______.
Fill in the blank(s) with the appropriate word(s).
beginning a public works program; cutting tax rates; increasing government spending
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A local store noticed that when it increased the price of milk from $2.50 to $3.50 per gallon, it sold the same amount of milk per week (165 gallons). Since everything else remained the same, we would say the
a. demand for milk is perfectly elastic b. demand for milk is elastic c. demand for milk is perfectly inelastic d. demand for milk is unitary elastic e. law of supply does not apply in this situation
The cumulative total of the federal government's budget deficits has been greater than the total of its surpluses
a. True b. False
The long run is characterized by:
A. the relevance of the law of diminishing returns. B. at least one fixed input. C. the ability of the firm to change its plant size. D. insufficient time for firms to enter or leave the industry.
Samuelson and Solow reasoned that when aggregate demand was high, unemployment was
a. low, so there was upward pressure on wages and prices. b. low, so there was downward pressure on wages and prices. c. high, so there was upward pressure on wages and prices. d. high, so there was downward pressure on wages and prices.