Some people oppose deficit spending because it:
A. crowds out private investment.
B. violates the cost-benefit principle.
C. leads to rent seeking.
D. promotes logrolling.
Answer: A
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One drawback in using fiscal policy as a stabilization tool is that fiscal policy:
A. is not useful for dealing with prolonged episodes of recession. B. effects are frequently offset by automatic stabilizers. C. affects potential output as well as aggregate expenditure. D. is too flexible to use to close output gaps.
A capital ________ can promote financial instability in an emerging-market country because it is what forces a country to ________ its currency
A) inflow; devalue B) inflow; revalue C) outflow; devalue D) outflow; revalue
According to the law of demand, the higher the price of an assigned textbook, the _______________ the quantity demanded of assigned textbooks will be, ceteris paribus, and the ______________ likely students will seek out an alternative to the assigned textbook
A) lower; less B) lower; more C) higher; less D) higher; more
To calculate the marginal utility of consuming the Nth product:
A. divide total satisfaction from consuming all N products by N. B. subtract total satisfaction from consuming N - 1 products from total satisfaction from consuming N products. C. divide total satisfaction from consuming all N products by the price of the product. D. subtract additional satisfaction from consuming the (N - 1)th production from the additional satisfaction from consuming the Nth product.