A & H Deliveries earned about $500,000 less than usual this year because of a downturn in the economy. The company also had to pay $200,000 less in taxes this year because their income and payroll were smaller. The decrease in taxes A & H had to pay during the downturn is an example of _____.
a. the crowding-out effect
b. automatic stabilization
c. discretionary policy
d. a recognition lag
b. automatic stabilization
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If the Fed increases the money supply, the equilibrium value of money decreases and the equilibrium price level increases
a. True b. False Indicate whether the statement is true or false
The implementation lag for monetary policy requires
A. changes in exports and imports. B. congressional changes in spending and taxes. C. changes in state funding rebates. D. rather immediate changes in open market operations.
If price is between AVC and ATC, the best and most practical thing for a perfectly competitive firm to do is
A) raise prices. B) lower prices to gain revenue from extra volume. C) shut down immediately, but not liquidate the business. D) shut down immediately and liquidate the business. E) continue operating, but plan to go out of business.
The United States has a much higher national debt as a percentage of GDP compared to other industrialized nations
a. True b. False Indicate whether the statement is true or false