2 tools of fiscal policy used to positively stimulate the economy:
What will be an ideal response?
1) increases in government spending
2) tax reductions
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An automobile is an asset, but it is not liquid because:
A. the owner may still be making payments on the loan. B. the automobile may not be in good repair. C. the transactions costs for turning it into money are high. D. the automobile cannot be sold without a loss in value.
Sally recently got a 15 percent raise. She now purchases 7.5 percent more steak dinners. Sally's income elasticity for steak dinners is:
A. 0.5. B. 0.75. C. 1.5. D. 2.0.
Specialization in production is important primarily because it:
A. results in greater total output. B. allows society to avoid the coincidence-of-wants problem. C. allows society to trade by barter. D. allows society to have fewer capital goods.
Regulatory trade restrictions:
A. are irrelevant since they are seldom used. B. may be justified depending on the nature of the restriction. C. are always justified. D. are never justified.