Which of the following events could account for the situation shown?
a. an increase in natural resources
b. a change in the expected price level
c. an increase in government regulations
d. a temporary decrease in an input price
a. an increase in natural resources
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Which of the following statements is not true with regard to automatic stabilizers? a. The most important automatic stabilizer is the tax system
b. They act as shock absorbers to the economy. c. They require legislative action. d. Automatic stabilizers like government transfer payments change as business cycles conditions change.
According to economic theory, it is often rational for a politician to support special interest groups at the expense of unorganized, widely dispersed groups (for example, taxpayers or consumers)
a. only when the gains that accrue to the special interest group exceed the costs imposed on other voters. b. when nonspecial-interest voters are unconcerned or uninformed about the issue, and campaign funds are readily available from the special interest group. c. only if the government action is socially efficient. d. only if the government action will reduce the monopoly power of business or labor and, thereby, lead to an improvement in the general welfare of consumers.
Fiona uses all of her income to purchase popcorn and butter. At any two points A and B on Fiona’s budget constraint,
a. Fiona is equally happy.
b. Fiona is spending more money on popcorn than she is spending on butter.
c. Fiona's income is different.
d. the price of popcorn relative to the price of butter is the same.
If a country has a floating exchange rate, it means their currency:
A. is set by the government. B. can be freely traded and their value is determined by the market. C. has a value determined by the market for loanable funds. D. All of these statements are true.