An active deficit:
a. Is the portion of the government deficit that automatically helps a nation from falling further into a recession.
b. Is always less than the actual deficit when a nation is currently below full employment.
c. Is the difference between government spending and taxes at full employment.
d. All of the above are true.
e. None of the above is true.
.C
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In a centrally planned economy, resources are allocated primarily in accordance with directives from government agencies.
Answer the following statement true (T) or false (F)
The loanable funds market brings together savers and borrowers to determine the
a. marginal rate of return on investment b. rate of time preference c. market rate of interest d. marginal resource cost of investment e. marginal revenue product of investment
Using the multiplier, we can easily calculate the effect of further changes in government spending.
What will be an ideal response?
When the government sets a price floor which is below the equilibrium price
A) a surplus will develop. B) a shortage will develop. C) the equilibrium price will be maintained. D) a price ceiling will follow.