Sheila sells corn in a perfectly competitive market. This month Sheila receives a higher price for a bushel of corn than she did last month. Which of the following might explain this?
A. The market demand increased for corn.
B. The market demand decreased for corn.
C. Firms entered the market.
D. Sheila's costs have decreased.
Answer: A
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Did the fiscal policy of the 1930s bring an end to the Great Depression?
a. No, government spending and budget deficits as a share of GDP were relatively small during the 1930s, and there is little evidence that fiscal policy did much to stimulate output. b. No, even though budget deficits steadily rose from 2 percent of GDP in the early 1930s to more than 10 percent of GDP in 1939, this expansionary fiscal policy had little effect on output. c. Yes, even though the spending programs of the New Deal led to budget deficits, they also led to a steady reduction in the rate of unemployment during the latter half of the 1930s. d. Yes, the fiscal policy that kept the federal budget balanced throughout the 1930s created a stable business climate and eventually stimulated investment.
In an effort to balance the budget, the government cuts spending rather than increasing taxes. What will happen to the consumption schedule?
A. It will become steeper. B. It will become flatter. C. It will shift upward. D. It will shift downward. E. It will remain the same and move along it.
A tariff differs from a quota in that a tariff is:
A. levied on imports, whereas a quota is imposed on exports. B. levied on exports, whereas a quota is imposed on imports. C. a tax levied on exports, whereas a quota is a limit on the number of units of a good that can be exported. D. a tax imposed on imports, whereas a quota is an absolute limit to the number of units of a good that can be imported.
As an economy adjusts to an decrease in the saving rate, we would expect output per worker
A) to decrease at a constant rate and continue decreasing at that rate in the steady state. B) to decrease at a permanently higher rate. C) to increase at a permanently higher rate. D) to return to its original level. E) none of the above