One advantage of automatic fiscal policy over discretionary fiscal policy is that automatic fiscal policy:
A. Makes the actual budget a better reflection of the condition of the economy than the Standardized budget
B. Does not produce a cyclical deficit as discretionary policy does
C. Is not subject to the timing problems of discretionary policy
D. Has a greater multiplier effect than discretionary policy
C. Is not subject to the timing problems of discretionary policy
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Under what conditions would an increase in market demand lead to the same long-run equilibrium price?
A. Potential new firms in the market are not attracted by economic profits. B. The firms in the market are part of a constant-cost industry. C. The firms in the market are part of an increasing-cost industry. D. The firms in the market are part of a decreasing-cost industry.
Suppose output is $35 billion, government purchases are $10 billion, desired consumption is $15 billion, and desired investment is $6 billion. Absorption is equal to
A) $25 billion. B) $31 billion. C) $35 billion. D) $39 billion.
During which of the following years did the Fed fail to pursue a policy aimed at stabilizing the output ratio?
A) 1988 B) 1990 C) 1994 D) 1997
Owners of a parking lot are deciding whether or not to add more parking spaces to the lot. The owners should stop adding parking spaces where:
a. LRMR=LRMC
b. LRMR>LRMC
c. LRMR