Which of the following is not a legitimate reason for maintaining federal budget deficits?
a. Deficits boost domestic saving, which in the long run could promote economic growth.
b. Deficits help reduce the size and duration of recessions through automatic stabilizers.
c. Deficits are used to finance capital projects
d. Public spending through deficit financing wins support from the voters.
e. A federal budget deficit stimulates aggregate demand.
a
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If each player in a game uses a strategy that results in a Nash equilibrium outcome, the players are most likely to say
A) "I don't like my choice, because I think I could have done better." B) "Given the strategies chosen by the other players in the game, I probably could have done better if I had more time." C) "Given the strategies chosen by the other players in the game, I made the best possible choice." D) "There was no real strategy on my part, I basically made an educated guess."
Which of the following is an example of cyclical unemployment?
a. A recent college graduate still looking for her first job b. A car salesman who loses his job because of a recession c. A ski instructor who is out of work during the summer d. An economics journalist who just quit her writing job in order to begin a new career as a college professor next month e. A worker displaced from his factory job because of greater mechanization in the workplace
Which of the following is correct?
a. Efficiency deals with the size of the economic pie, and equality deals with how fairly the pie is sliced. b. Equality can be judged on positive grounds whereas efficiency requires normative judgments. c. Efficiency is more difficult to evaluate than equality. d. Equality and efficiency are both maximized in a society when total surplus is maximized.
Suppose the market for Mexican food in your neighborhood was in equilibrium.a. Draw a diagram showing the demand and supply curve for Mexican food. Indicate the market equilibrium quantity and price in this market.b. Suppose the government imposed a binding price ceiling in this market, with the goal of making Mexican food affordable to most residents. Add the price ceiling to your diagram, and then identify the quantity demanded and quantity supply in this market with the price ceiling.c. Would the government be able to make Mexican food affordable to most people with the price ceiling? Explain your answer using the diagram you drew in part (b).
What will be an ideal response?