Which combination of fiscal policy actions would most stimulate an economy in a deep recession?
A. Increase in taxes and decrease in government spending
B. Decrease in taxes and increase in government spending
C. Increase in taxes and government spending
D. Decrease in taxes and government spending
Answer: B
You might also like to view...
Tiger Woods, a professional golfer, pays a garage mechanic to change the motor oil of his car even though he can do the work himself. Which of the following best explains why Tiger Woods does not change the oil himself?
A) Tiger Woods has an absolute advantage in changing oil.
B) Tiger Woods has a comparative advantage in changing oil.
C) There is no opportunity cost for the garage mechanic to change oil.
D) The opportunity cost of changing oil is higher for Tiger Woods than for the garage mechanic.
If the Federal Reserve wished to engage in expansionary monetary policy, it could
A. sell government debt. B. lower the federal funds rate target. C. raise the reserve ratio. D. raise the primary credit rate.
Which of the following four firms would most likely NOT be part of a perfectly competitive market?
A) Mark sells his tomatoes at the local farmers market. B) The WaveHouse is the only place in San Diego where you can ride an indoor 10 foot wave. C) Village Pizza sells pizza in a college town. D) Space Age Fuel is a gas station in Bend, Oregon.
Refer to Scenario 2.2. Under what circumstances will the equilibrium level of output of dental care remain the same?
A) If supply shifts more than demand. B) If demand shifts more than supply. C) If both demand and supply shift by the same magnitude. D) If supply and demand shift in the same direction.