When consumer spending is high, the economy usually is in a(n)
A. depression.
B. growth stage.
C. inflationary period.
D. recession.
B. growth stage.
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When we keep part of our wealth in a bank checking account, we are using money as a
A) store of value. B) medium of exchange. C) barter token. D) unit of account. E) unit of currency.
The marginal cost of hiring the 4th worker is
a. $40 b. $100 c. $20 d. $0
A critical assumption made by all economic models is that
a. few economic decision makers face constraints under capitalism b. few economic decision makers face constraints under communism c. every economic decision maker, except the extremely wealthy, faces constraints d. every economic decision maker, except the federal government, faces constraints e. every economic decision maker faces constraints under every economic system
Which one of the following is an area of agreement among modern macroeconomists with regard to the use of fiscal policy?
a. Congressional action is necessary if automatic stabilizers are going to be an effective stabilization tool. b. It is difficult to time changes in discretionary fiscal policy in a manner that will promote stability. c. Fiscal policy is more potent than the early Keynesian view implied. d. Budget deficits are a highly effective tool with which to combat a severe recession.