Which of the following options could be used to eliminate a recessionary gap?

A. Decrease consumption
B. ?Increase investment
C. ?Decrease investment
D. ?Increase taxes


Answer: B

Economics

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If the slope of a demand curve is infinite, then the price elasticity of demand is:

A. one. B. zero. C. infinite. D. equal to the price of the good.

Economics

One way in which politicians have tried to cut federal spending and borrowing was to refuse to

a. lower the legal debt limit. b. default on Treasury bonds. c. raise the legal federal debt limit. d. issue additional Treasury bonds.

Economics

Which of the following describes a reason U.S. consumers might especially value trade with China?

a. China is a large market with potential to buy many U.S. exports. b. China supplies many goods imported to the United States. c. China and the United States have similar cultural practices. d. China was closed off from U.S. trade for several decades.

Economics

Consider an antique auction where bidders have independent private values. There are two bidders, each of whom perceives that valuations are uniformly distributed between $100 and $1,000. One of the bidders is Sue, who knows her own valuation is $200. What is Sue's optimal bidding strategy in a first-price, sealed-bid auction?

A. Submit a bid that is less than $150. B. Submit a bid of $200. C. Submit a bid of $150. D. Yell "mine" when the bid reaches $150.

Economics