Political business cycles result:
a. from the economic fluctuations that occur when discretionary policy is manipulated for political gain.
b. from the recessionary gap that occurs when output falls short of the economy's potential
c. from the expansionary gap that occurs when output exceeds the economy's potential.
d. when the spending multiplier is manipulated for political gain.
e. from the economic fluctuations that occur when automatic stabilizers are manipulated for political gain.
a
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The demand for money is downward sloping, because at higher interest rates
A) the opportunity cost of holding money is higher. B) the opportunity cost of holding money is decreasing. C) the opportunity cost of holding money is constant. D) the opportunity cost of holding cash is lower.
Refer to Figure 10.1. If Daisy contributes to the lighting, Luke should
A) contribute if Bo contributes. B) not contribute only if Bo does not contribute. C) contribute if Bo does not contribute. D) not contribute regardless of what Bo decides to do.
If the government implements a tax on the general public to pay for street lighting in one neighborhood,
A) the tax redistributes well-being and the benevolent social planner is not pleased. B) the tax redistributes well-being, but the benevolent social planner is pleased. C) the tax reduces well being and the benevolent social planner is not pleased. D) the tax has no bearing on well-being and the benevolent social planner is indifferent.
When we graph consumption as a function of national income rather than as a function of ________, the slope of this consumption function is the ________
A) disposable income; MPC B) personal income; MPS C) disposable income; MPS D) personal income; MPC