Refer to the above diagram. Assume that G and T1 are the relevant curves and that the economy is currently at B, which is its full-employment GDP. This economy has a:
A. cyclically adjusted budget surplus and an actual budget surplus.
B. cyclically adjusted budget surplus only.
C. cyclically adjusted budget deficit only.
D. cyclically adjusted deficit and an actual budget deficit.
Answer: A
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The opportunity cost of something is
A) what you sacrifice to get the good. B) the price you pay for the good. C) what you are willing to pay for the good. D) a measure of the scarcity of the good.
An increase in government expenditure shifts the AD curve __________ and an increase in taxes shifts the AD curve __________
a) rightward; rightward b) rightward; leftward c) leftward; rightward d) leftward; rightward
In a fixed exchange rate system, a decrease in the exchange rate at which a currency is pegged is called a(n):
A. appreciation. B. devaluation. C. revaluation. D. depreciation.
Increases in pollution regulations would
A. decrease aggregate demand. B. decrease short-run aggregate supply. C. increase aggregate demand. D. increase short-run aggregate supply.