Congress passes a tax cut because economists predict a coming recession. This is an example of what?
a. Automatic stabilization.
b. Active fiscal policy.
c. Discretionary monetary policy.
d. Non-discretionary monetary policy.
e. none of the above.
b. Active fiscal policy.
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Refer to the figure above. What is the producer surplus when Lithasia engages in trade and the government imposes a tariff of $1 on chairs?
A) $5 B) $20 C) $30 D) $40
When the supply and/or demand curve shift, the new market clearing price is
A) reached instantaneously. B) reached only after the government intervenes in the market. C) reached after some period of adjustment. D) never reached.
Cross-price elasticity of demand is a measure of the extent to which a change in the price of one good can shift the quantity demanded for another good
a. True b. False Indicate whether the statement is true or false
The process of the investment accelerator involves
a. positive feedback from aggregate demand to investment. b. negative feedback from aggregate demand to investment. c. positive feedback from aggregate supply to investment. d. negative feedback from aggregate supply to investment.