Automatic stabilizers are ______.
a. too weak to stop a significant recession
b. effective only during a severe recession
c. subject to significant implementation lags
d. less effective than fiscal policy in a normal economy
a. too weak to stop a significant recession
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Which of the following is a macroeconomic topic?
A) Why did production and jobs expand slowly in 2011? B) General Motors decides what prices to set for their new models. C) The federal government's decision to spend more on environmental protection D) The effect of floods in agricultural areas on the price and quantity of wheat E) The county government's decision to increase the sales tax for your county
Refer to Figure 23-3. Suppose that government spending increases, shifting up the aggregate expenditure line. GDP increases from GDP1 to GDP2, and this amount is $200 billion. If the MPC is 0.8, then what is the distance between N and L or by how much did government spending change?
A) $16 billion B) $40 billion C) $200 billion D) $1,000 billion
When the tax rate on wages falls (so that the take-home wage or effective wage increases), the budget line
A. shifts out, parallel to the old budget line. B. shifts in, parallel to the old budget line. C. rotates out along the leisure axis. D. rotates in along the leisure axis. E. rotates out along the consumption axis.
Suppose that the price of a money clip increases from $0.75 to $0.90 and quantity supplied rises from 8,000 units to 10,000 units. Use the midpoint formula to calculate the price elasticity of supply
A) 1.22 B) 1.0 C) 0.82 D) 0.07