From a public choice viewpoint, the persistent budget deficits of recent decades are
a. surprising, because politicians have a strong incentive to balance the government's budget.
b. an expected result, because the political incentive structure makes it attractive for politicians to levy taxes rather than spend on current programs.
c. surprising, because politicians have a strong incentive to run budget surpluses and thereby indicate that their actions have generated a profit.
d. an expected result, because the political incentive structure makes it attractive for politicians to spend on current programs rather than levy taxes.
D
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In the foreign exchange market, the
A) supply of dollars decreases as the exchange rate increases and the quantity of dollars supplied does not change. B) quantity of dollars supplied increases as the exchange rate decreases and the supply of dollars does not change. C) quantity of dollars supplied increases as the exchange rate increases and the supply of dollars does not change. D) supply of dollars increases as the exchange rate increases and the quantity of dollars supplied does not change. E) both the quantity of dollars supplied and the supply of dollars increases as the exchange rate increases.
"Last October, due to an early frost, the price of a pumpkin increased by 10 percent compared to the price in the previous Halloween season. As a result, the quantity demanded county-wide decreased from 2 million to 1.5 million"
Based on this statement, it is certain that the A) demand curve for Halloween costumes shifted leftward. B) price elasticity of demand for pumpkins decreased from its value in previous years. C) demand curve for pumpkins shifted leftward. D) total revenue from the sale of pumpkins decreased.
As DVDs become popular substitutes for video cassettes, demand for video cassettes is likely to
a. become less price elastic b. become more price elastic c. increase d. stay the same e. become unit elastic
The nation's disposable income increases by $400 billion and, as a result, consumer spending increases by $320 billion. Therefore, the MPC equals
a. 0.16. b. 0.20. c. 0.60. d. 0.80. e. 0.96.