The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending.
B. recessionary gaps.
C. expansionary gaps.
D. unemployment.
Answer: B
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An excise tax
A) acts as a negative incentive to consume that good or service. B) is illegal in Florida, Georgia, and Alaska. C) is often used to encourage the use of a good. D) is a value added tax (VAT).
In time series, the definition of causal effects
A) says that one variable helps predict another variable. B) does not make much sense since there are not multiple subjects. C) assumes that the same subject is being given different treatments at different points in time. D) requires panel data.
Cyclical unemployment results from: a. a mismatch of skills
b. being in the wrong geographical location. c. monetary cost and the time it takes to find the best job. d. seasonal decreases in demand for labor. e. prolonged declines in business activity.
Which of the following is true?
A) A budget surplus will increase the national debt. B) A budget deficit will increase the national debt. C) A budget deficit will reduce the national debt. D) A balanced budget will increase the national debt.