The gap between Federal expenditures and Federal revenues after 1980 was caused primarily by
A) the recessions which occurred in the 1980s.
B) a substantial decrease in Federal revenues.
C) a substantial increase in Federal expenditures.
D) rising interest rates which made caused investment and growth to collapse.
C
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Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
For a perfectly competitive corn grower in Nebraska, the marginal revenue curve is
A) downward sloping. B) the same as its demand curve. C) upward sloping. D) U-shaped. E) vertical at the profit maximizing quantity of production.
The owner of the local "Fatty Foods" chain of restaurants is thinking about retiring. He has two options: he can hire salaried managers for his stores or franchise them to local entrepreneurs. If the owner believes that there are high costs to monitoring the stores after he retires, what should he do?
a. Let the stores stay company stores b. Sell them off as franchises c. Shut down the business completely d. Never retire
Because of the slope of the aggregate demand curve, we can say that
A) a decrease in the price level leads to a lower level of real GDP demanded. B) an increase in the price level leads to no change in the level of real GDP demanded. C) a decrease in the price level leads to a higher level of real GDP demanded. D) an increase in the price level leads to a higher level of real GDP demanded.