During a recession, tax revenues ________ while government transfer payments ________, thereby mitigating part of the adverse effects of a recession and stabilizing the economy.
A. fall; increase
B. fall; decrease
C. rise; increase
D. rise; decrease
Answer: A
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What is the main difference between new Keynesian economists and monetarists? a. Monetarists support a fixed-price model, whereas new Keynesians believe that pricesfluctuate
b. Monetarists reject the idea that government intervention can stabilize the economy,whereas new Keynesians support this notion. c. Monetarists believe that the aggregate supply curve is always horizontal, whereas newKeynesians believe that the aggregate supply curve is always vertical. d. Monetarists believe that an increase in the money supply changes real GDPinstantaneously, whereas new Keynesians assume that economic policy operates witha long and variable lag. e. Monetarists believe that deficit spending helps stimulate economic growth, whereas new Keynesians advocate a balanced budget.
As the term “opportunity cost” is defined in the text, the opportunity cost of going to college includes
A. both tuition and the value of the student’s time. B. tuition but not the value of the student’s time, which is a cash cost. C. the value of the student’s time but not tuition, which is a monetary cost. D. neither tuition nor the value of the student’s time, since obtaining a college degree makes one’s income higher in the future. E. neither tuition nor the value of the student’s time, at least at subsidized state universities.
Since World War II, the percentage of U.S. workers who are unionized has declined from about 86 percent to its current level of 60 percent
a. True b. False Indicate whether the statement is true or false
If inflation is underestimated by decision makers in the economy when it is rising, the SRAS curve will tend to be: a. vertical
b. horizontal. c. downward sloping. d. upward sloping.