Why did President George W. Bush feel the need for a stimulus package for the U.S. economy after September 11, 2001? As a conservative, what type of fiscal stimulus would be most appealing to President Bush?
What will be an ideal response?
The decline in real GDP and the existence of rising unemployment indicated that a recessionary gap was developing in the U.S. economy. To combat this macroeconomic condition, some kind of fiscal policy to stimulate aggregate demand was needed. To shift the expenditures schedule upward and shift the aggregate demand curve outward was what was called for. As a conservative and a Republican, it was consistent for President Bush to advocate a tax cut that would stimulate consumption spending. This increase in spending would come from the private sector, reflecting the belief of conservatives that the private sector should expand and the public sector should get smaller.
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Which of the following statements is true?
A) Economic growth is the direct cause of declining poverty. B) Growth in unemployment is the direct cause of declining poverty. C) There are some countries where growth and poverty have both increased. D) Economic growth is the direct cause of declining inequality.
Suppose a monopolist is considering starting a $500,000 advertising campaign. The current demand for its product is given by
p = 150 - 3Q where Q is the quantity of output in thousands. If the monopolist undertakes the advertising campaign, it expects demand to increase to p = 200 - 4Q The (non-advertising) cost for the monopolist is C(Q) = 30Q. a. Determine whether the monopolist should undertake the advertising campaign assuming that it is correctly anticipating the potential increase in demand. b. What is the most the monopolist will invest towards this advertising campaign?
Which economic concept is the closest to the saying "There's no free lunch"?
a. Specialization b. Unlimited wants c. Underutilization of resources d. Opportunity costs e. Overutilization of resources
The phase of the business cycle that follows a recession is known as the:
A. peak. B. recession. C. recovery. D. trough.