Use the following graph to answer the next question.
If the economy is currently in equilibrium at output level Q2, but full-employment output is at level Q1, which of the following fiscal policy actions would be the most effective at bringing the economy back to its full-employment output level?
A. Increase taxes and increase government purchases.
B. Reduce government purchases and cut taxes.
C. Cut taxes.
D. Increase taxes.
Answer: D
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Some people will often remark that the used car market is a counter-cyclical business,meaning that the fortunes of the business tend to move in the opposite direction of the health of the economy
Why might this be true and what conclusion can you make about what kind of a good used cars would be classified as economically speaking?
Which of the following statements is correct about the demand curve of the perfectly competitive industry?
A) The demand curve of the perfectly competitive industry is horizontal as are the demand curves facing the individual firms. B) The market demand curve of perfect competition is vertical because the individual consumers are buying a homogeneous product. C) The market demand curve of the perfectly competitive industry is downward sloping while the demand curve facing an individual firm is horizontal. D) The market demand curve of the perfectly competitive industry is downward sloping, so the demand curves of the individual firms are also downward sloping.
Find the size of the civilian labor force from the following data: frictional unemployment = 150, structural unemployment = 200, cyclical unemployment = 225, discouraged workers = 25, underemployed workers = 75, fully employed workers = 850, total population = 2,000
a. 1,425 b. 1,450 c. 1,500 d. 1,525 e. 2,000
Persistent negative current account balances will lead to ____
a. c and d b. d and e c. budget deficits d. appreciation of foreign currency e. depreciation of domestic currency