The government budget deficit is
a. the difference between government purchases and government revenues from bonds and taxes
b. caused by a lack of business sector investment
c. created when the government expenditures exceed net taxes
d. caused by leakages in the economy
e. is created by government injections
C
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Suppose the market demand curve is perfectly elastic in an increasing-cost industry. If an output tax of t per unit is imposed on all producers of the good, what happens to the market equilibrium outcome?
A) The price paid by buyers increases and output declines B) The price paid by buyers does not change and output decrease C) The price paid by buyers and output increase D) The price paid by buyers and output decrease
Aggregate supply (AS) refers to:
a. the total quantity of inputs that firms will request and purchase. b. the total quantity of output that firms will produce and sell. c. the smallest quantity of output that firms will produce and destroy. d. the total quantity of inputs that firms will request and waste.
The short-run Phillips curve is based on the classical dichotomy
a. True b. False Indicate whether the statement is true or false
In the short run, the individual competitive firm's supply curve is that segment of the:
A. average variable cost curve lying below the marginal cost curve. B. marginal cost curve lying above the average variable cost curve. C. marginal revenue curve lying below the demand curve. D. marginal cost curve lying between the average total cost and average variable cost curves.