Suppose the government wants to maintain a balanced budget. To achieve this goal, when the economy falls into recession government would need to ________ taxes, which would cause aggregate demand to ________
A) decrease; decrease
B) decrease; increase
C) increase; decrease
D) increase; increase
Answer: C
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If the marginal utility of a product exceeds its MC, we would want, on efficiency grounds, to
A. increase production. B. decrease production. C. leave production constant. D. One cannot tell without knowing the price.
Economic conditions favor firms getting larger (producing larger quantity) when the firms are producing under conditions of:
a. Decreasing returns to scale b. Increasing returns to scale c. Constant returns to scale
A political leader suggesting that the country "stay the course" in the face of an economic downturn because things will be potentially made worse if tax and spending policies are adopted, is, by implication, suggesting ________ is better.
A. Discretionary Fiscal Policy B. Trade policy C. Regulatory changes D. Nondiscretionary Fiscal Policy
Representative commodity money retained its value because
A) it was an actual commodity. B) it was a fiat money. C) it was backed by the government. D) it could be exchanged for an actual commodity.