All of the following are examples of transfer payments except
A) welfare benefits to the poor.
B) dividend payments to the wealthy.
C) Social Security payments to the elderly.
D) unemployment compensation to the unemployed.
Ans: B) dividend payments to the wealthy.
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An economy is experiencing a high rate of inflation. The government wants to reduce aggregate demand by $36 billion to reduce inflationary pressure. The MPC is 0.75. By how much should the government raise taxes to achieve its objective?
A. $9 billion B. $6 billion C. $16 billion D. $12 billion
Which of the following was true of the actions of the Federal Reserve in response to the recession of 2008?
a. The Fed shifted toward a highly restrictive monetary policy in 2008, which was a major cause of the recession. b. The Fed continued to focus only on price stability and therefore it expanded the money supply at a slow and steady rate throughout the recession. c. The Fed introduced several new procedures for the conduct of monetary policy and substantially increased bank reserves as the recession worsened. d. The Fed continued to purchase and sell only U.S. Treasury bonds when conducting open market operations to control the money supply.
Because of automatic stabilizers, when real GDP increases...
What will be an ideal response?
The monopolist's marginal revenue is less than price since
A) additional units can only be sold if the price is lowered on all units sold. B) the demand function is horizontal. C) average revenue is also less than price. D) average total cost is declining.