The Keynesian analysis of fiscal policy argues that:
a. fiscal policy should generally be expansionary except during periods of economic recession.
b. fiscal policy should generally be restrictive except during inflationary booms.
c. the federal budget should be balanced annually except during war.
d. the federal budget should be used to maintain aggregate demand at a level consistent with full employment.
d
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The fact that employees often take longer lunch breaks than they are supposed to is an example of
a. the principal-agent problem. b. moral hazard. c. adverse selection. d. a golden parachute.
Opportunity cost is defined as the
A) total value of all the alternatives given up B) highest-valued alternative given up C) cost of not doing all of the things you would like to do. D) lowest-valued alternative given up
In a barter system individuals
A) find it impossible to specialize. B) must be entirely self-sufficient. C) find it difficult to specialize, but may be able to do so. D) will almost invariably specialize.
The marginal tax rate is the total tax paid divided by the amount of taxable income
a. True b. False Indicate whether the statement is true or false