Policy makers and citizens who want to expand the size of the government sector would favor stabilization policies that
A. raise G to eliminate a recessionary gap and lower taxes to eliminate an inflationary gap.
B. raise G to eliminate a recessionary gap and raise taxes to eliminate an inflationary gap.
C. reduce taxes to eliminate a recessionary gap and raise G to eliminate an inflationary gap.
D. reduce taxes to eliminate a recessionary gap and reduce G to eliminate an inflationary gap.
Answer: B
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Technological change allows perfectly competitive firms to ________ and leads to ________
A) lower their costs; lower prices for consumers B) raise their prices; higher prices for consumers C) lower their costs; higher prices so the firms can earn economic profits in the long run D) raise their costs; higher prices and maximum profits in the long run E) lower their costs; deadweight loss
Regarding the privilege of incorporation (the right to organize an enterprise in the corporate form), all of the following are true except
(a) It gives a business firm limited liability, perpetual life and the rights of a citizen. (b) It is not provided for directly by the Constitution because, apart from state governments, the Constitution made no provisions for groups. (c) It is provided for at all levels of government—federal, state and local. (d) There is no "except"; all of the above are true.
Why are demand curves downward sloping?
What will be an ideal response?
Which of the following is a feature of a behavioral economic model?
A. It focuses on cognitive, emotional, and social factors that affect individual decisions. B. It is based on marginal analysis in decision making. C. It suggests that individuals always behave rationally. D. It considers incentives an unimportant tool to study human behavior.