Deficit targeting acts as ________ because it requires taxes to be raised and government spending to be cut during ________.
A. an automatic stabilizer; an expansion
B. an automatic stabilizer; a contraction
C. an automatic destabilizer; an expansion
D. an automatic destabilizer; a contraction
Answer: D
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Joanne rents a TV production studio to produce an extra hour of a TV show. The rent is
A) a private cost and not an external cost. B) an external cost and not a private cost. C) both a private cost and an external cost. D) neither a private cost nor an external cost. E) a private benefit because viewers will benefit from watching the extra hour of the show.
The economy's self-correcting mechanism appears to be more efficient at curing
a. recessionary gaps by reducing price levels. b. inflationary gaps by reducing price levels. c. unemployment by reducing wage levels. d. inflationary gaps through inflation.
The property of transitivity implies that a consumer always prefers to consume more of either good, holding the consumption of the other good constant
a. True b. False Indicate whether the statement is true or false
Price elasticity of demand refers to the ratio of the:
A. percentage change in price of a good in response to a percentage change in quantity demanded. B. percentage change in price of a good to a percentage increase in income. C. percentage change in the quantity demanded of a good to a percentage change in its price. D. percentage change in the quantity demanded of a good to a percentage change in income.