In the short run, a fiscal policy action that results in a reduction in the size of the budget deficit will cause
A) a reduction in real GDP with falling prices if the economy was below or at full employment.
B) an inflationary gap if the economy was initially operating below full employment.
C) an inflationary gap if the economy was initially operating at full employment.
D) an increase in real GDP with stable prices if the economy was below full employment.
A
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The above figure illustrates the demand curve for a good. The good has
A) no substitutes. B) only one substitute. C) only a few substitutes. D) many substitutes.
Sharecropping can be best understood as
(a) a type of agreement preferred by peasants. (b) a type of agreement preferred by landlords. (c) a compromise between peasant and landlord preferences. (d) a type of agreement preferred by neither but given by tradition.
A movie monopolist sells to students and adults. The demand function for students is QdS = 600 - 100P and the demand function for adults is QdA = 1,200 - 100P. The marginal cost is $2 per ticket. Suppose the movie theater can price discriminate. What is the monopolist's profit from adults?
A. $400 B. $2,400 C. $2,500 D. $0
Why do futures have lower information costs and higher liquidity than forward contracts?
What will be an ideal response?