Stabilization policies can best be described as policies that
A. attempt to eliminate recession and/or inflation in the economy.
B. use changes in government spending to promote an equitable income distribution.
C. use changes in the money supply to lower income tax rates.
D. eliminate poverty through the adoption of work incentives.
A. attempt to eliminate recession and/or inflation in the economy.
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The exchange rate value of a foreign currency is ________ in the short run by a rise in its expected future spot exchange rate value.
A. not affected B. lowered C. made volatile D. raised
Natural Resources
What will be an ideal response?
A new technology is discovered which results in all new cars producing 50 percent less pollution. Which of the following is true?
A) Real GDP increases because the air is cleaner, but nominal GDP does not change since air is free. B) GDP will increase to reflect the fact that the air we breathe is cleaner. C) GDP will increase if there is an increase in the production cost and price of the car. D) GDP increases anytime pollution is reduced. E) GDP will decrease.
Net utility is
A. equal to total utility from the quantity acquired of a good minus the utility lost by having to pay for it. B. equal to the sum of the marginal utilities. C. equal to an optimal number easily calculated by the consumer. D. always greater than total utility.