If C = 500 + 0.9Y and I = 400, then the equilibrium level of income is
A. 900.
B. 1,000.
C. 1,800.
D. 9,000.
Answer: D
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If the total budget deficit is $200 billion and the deficit at full employment is $120 billion, then the
A. Structural deficit is $80 billion. B. Cyclical deficit is $120 billion. C. Cyclical deficit is $80 billion. D. Structural deficit is $320 billion.
Governments choose to mandate participation in a program, like auto insurance, when:
A. the market would exist illegally. B. the market would not otherwise exist. C. the functioning of those markets is thought to be in the public interest. D. None of these statements is true.
Laissez-faire capitalism limits the government's economic functions to the following, except:
A. Protecting private property rights B. Establishing a legal environment to enforce contracts among individuals C. Preventing individuals and firms from coercing others D. Setting prices of individual goods and services
Debbie observes that leaves fall from trees before the fist day of winter, and concludes that the falling leaves cause winter to begin. This is an example of
A. Ockham's razor. B. the fallacy of logic. C. ceteris paribus. D. the post hoc, ergo propter hoc fallacy.