Automatic stabilizers
What will be an ideal response?
: tax and spending institutions that tend to increase government revenues and lower government spending during economic expansions but lower revenues and raise government spending during economic recession
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As output increases
A) the difference between average total cost and average variable cost decreases. B) marginal cost increases continuously. C) average variable cost becomes smaller and smaller. D) the difference between average total cost and average variable cost becomes greater and greater.
Which of the following leads to an increase in real GDP?
A) a decrease in the inflation rate in other countries relative to the inflation rate in the United States B) a decrease in interest rates C) a decrease in government spending D) Households have increasingly pessimistic expectations about future income.
Refer to the figure above, which shows domestic supply and demand. If P1 is equal to P2 (the world price) plus a tariff, then the social loss from the tariff is equal to
A) a + c B) b C) P1 ( Q3 - Q2 ) D) P2 [(Q2 - Q1 ) + (Q4 - Q3 )] E) a + b + c
Producers tend to be better represented in lobbying efforts and other elements of the political process than consumers because
a. producers are generally more intelligent and, therefore, better informed. b. producers are generally better organized than consumers. c. producers are better educated than consumers. d. the number of producers affected by the outcome of a particular political issue is usually greater than the number of consumers affected.