Which of the following can be considered a free-trade zone?
A. all English-speaking nations
B. countries that are members of GATT
C. the industrialized OECD nations
D. the European Union
Answer: D
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The structural deficit can be defined as
a. the deficit that is structurally obstructing economic recovery to reach level of high employment. b. a hypothetical construct that estimates the deficit, given current tax rates and expenditure policies, if the economy were operating at some fixed high-employment level. c. the deficit necessary to restructure the economy and reach a desired high-employment level. d. the deficit that would prevail if fiscal policy were structured differently in order to reach a desired high-employment level.
Assuming the economy in the graph shown is currently at equilibrium A, we can conclude:
A. there must be unemployment of resources. B. the economy is in a recession. C. the economy is producing less than its potential level of output. D. All of these are true.
Which of the following occurs when disposable income is zero?
A) consumption must be zero B) saving must be zero C) saving must be positive D) consumption is negative E) none of the above
Suppose elasticity of demand is 0.2, elasticity of supply is 0.7, and a 10 percent excise tax is levied on producers. Which of the following changes will reduce the share of the tax paid by consumers?
A. Elasticity of demand falls to 0.1. B. Nothing will change the burden of the tax. C. Elasticity of supply falls to 0.3. D. The tax is increased to 20 percent.