Expansionary fiscal policy is incapable of solving the underlying problem of a negative real shock. Which of the following problems also makes it difficult to use fiscal policy to combat a negative real shock?
A. The problem of timeliness of fiscal policy
B. The problem of crowding out of private spending
C. All of these problems make it difficult.
D. The problem of targeting fiscal policy
Ans: C. All of these problems make it difficult.
You might also like to view...
Refer to the figure above. What does the region ABCPe denote?
A) Economic profit B) Loss incurred by the producer C) Consumer surplus D) Deadweight loss
Slick Shades has a constant marginal cost of production equal to $40 and the distributors have a constant marginal cost of distribution equal to $20. If Slick Shades is producing the profit-maximizing number of sunglasses (in hundreds) and charging the profit-maximizing wholesale price, what is Slick Shades' profit (in hundreds)?
The figure above shows the wholesale demand and marginal revenue curves for Slick Shades Sunglasses, a sunglasses firm with market power. Slick Shades Sunglasses has a constant marginal cost of production and it sells to perfectly competitive independent retail distributors that have a constant marginal cost of distribution.
A) $6,400
B) $8,000
C) $7,200
D) $5,60
If marginal revenue is greater than marginal cost, the firm should
A) raise price. B) raise marginal revenue. C) increase its rate of output. D) decrease its rate of output.
In product markets:
a. Businesses sell resources to households b. Businesses sell goods and services to households c. Households sell products to business firms d. Households sell resources to business firms