One way the government can boost the economy out of a recession is:
A. with public announcements telling the public to save their money.
B. by increasing government spending.
C. by setting price ceilings on most goods so people can afford them.
D. None of these will help an economy in recession.
Answer: B
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The economy's two most important financial markets are
a. the investment market and the saving market. b. the bond market and the stock market. c. banks and the stock market. d. financial markets and financial institutions.
Which statement is false, given what you know about the local substitution argument?
A. People in the town will buy their clothes with team logos on them, so the economic impact of that buying must be counted as additional money to the city from having the sports team there. Also, people in the town will go to the games and buy tickets, food, and souvenirs, causing the economy of the town to get better. B. People in the town will go to the games and buy tickets, food, and souvenirs, causing the economy of the town to get better. C. People in the town will buy their clothes with team logos on them, so the economic impact of that buying must be counted as additional money to the city from having the sports team there. D. People from out of town will go to the games and buy tickets, food, and souvenirs, causing the economy of the town to get better.
As people buy more of the same product,
A. their consumer surplus rises. B. their consumer surplus falls. C. their consumer surplus will fall to zero to maximize their total utility. D. the additional purchases do not affect their consumer surplus.
Economists began to lose confidence in the Phillips curve during the