Assuming the economy is represented by the graph shown, if the government were to enact a partially successful expansionary fiscal policy, it would be most likely to:
A. move from equilibrium A to B.
B. move from equilibrium B to A.
C. cause unemployment to temporarily increase.
D. cause deflation.
A. move from equilibrium A to B.
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Issuing marketable emission allowance permits to polluting firms will result in those firms polluting more than would be desired by the benevolent social planner
Indicate whether the statement is true or false
Which of the following hypotheses about voter behavior have been advanced in public-choice literature?
a. Voters are myopic b. Unemployment is more likely to result in vote loss than is higher inflation c. Deficit bias of the budget process d. Both a and c e. All of the above
When the price elasticity of demand is large, then
a. the product is more likely to be a necessity. b. the responsiveness of quantity demanded to a change in price is small. c. the percentage change in price divided by the percentage change in quantity demanded is large. d. the responsiveness of quantity demanded to a change in price is large.
You own a company that produces coasters. You set the price at $10 for a set of six coasters. Then you produced 10,000 sets. After one year, you realize you have a surplus of 4,000 sets. What steps would you take to reach equilibrium?
What will be an ideal response?