The field of economics in which the tools of economics are used to understand the functioning of government is
political economy.
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When the government increases spending (holding taxes constant), the budget balance _____. This causes the interest rate in the market for loanable funds to _____ and investment to _____
Fill in the blank(s) with correct word
Relative to uniform-price policy, price discrimination across segmented markets (sometimes called third-degree price discrimination):
a. always reduces welfare. b. always increases welfare. c. may increase welfare if total output falls. d. may increase welfare if total output rises.
A U-shaped long-run average cost curve indicates that
A) economies of scale follow diseconomies of scale. B) diseconomies of scale follow economies of scale C) economies of scale and economies of scope are the same. D) economies of scale dominate diseconomies of scale over all levels of production.
If the MPC is 0.9, and the government cuts spending by $200b, the overall effect on GDP will be:
A. an increase of $2,000b. B. an increase of $180b. C. a decrease of $1,800b. D. a decrease of $2,000b.