The structural surplus is
A) the difference between the actual surplus and the natural employment surplus and it increases whenever income rises.
B) identical to the natural employment surplus and it increases whenever tax rates are cut.
C) identical to the natural employment surplus and it decreases whenever the natural level of output increases.
D) identical to the natural employment surplus and it increases whenever the natural level of output increases.
D
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In the graph for the consumption function, the 45-degree line
A) contains only a consumption component.
B) represents both planned consumption and planned investment.
C) shows various combinations where planned consumption equals real disposable income.
D) reflects a decreasing APC as real disposable income rises.
When a government has decided on a permanent spending increase, a valid reason to increase borrowing rather than taxes might be to ________
A) to avoid an unnecessary stimulus to aggregate demand B) to shift the burden from domestic taxpayers to foreign bond holders C) to avoid distortions that might reduce long-run aggregate supply D) to avoid an increase in income inequality
If there are only three firms in an industry with 50 percent, 40 percent, and 10 percent of the market, respectively, the Herfindahl Index is
a. 40 b. 100 c. 200 d. 33 e. 4,200
If unit costs remain constant as the quantity of production increases and all inputs are variable, then a firm is experiencing
A) constant returns to scale. B) economies of scale. C) diseconomies of scale. D) falling economies of scope.