Which of the following actions results in the shortest lag between recognition of a problem and an appropriate stabilization response?
A. Congress writes legislation providing more automatic stabilizers in the economy.
B. Congress provides limited authority to the president to alter fiscal or monetary policy for the purpose of stabilization.
C. The appropriation and authorization responsibilities of Congress are transferred to the executive branch in order to eliminate congressional lags.
D. Congress takes authority over stabilization and is not required to wait for the executive branch to respond.
Answer: A
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In 2013, which component of U.S. GDP had a negative value?
A) government spending B) investment C) net exports D) Components of GDP cannot have a negative value.
When a monopolist engages in perfect price discrimination, the quantity produced and sold
A) could be lower, higher, or the same as that produced and sold if it adopted a single price. B) is lower than the quantity produced and sold if it adopted a single price. C) is larger than the quantity produced and sold if it adopted a single price. D) is the same level as that produced and sold if it adopted a single price.
Suppose output is $35 billion, government purchases are $10 billion, desired consumption is $15 billion, and desired investment is $6 billion. Net foreign lending would be equal to
A) -$4 billion. B) -$2 billion. C) $2 billion. D) $4 billion.
According to the government budget constraint, any excess of public expenditures and transfers over taxes and user fees must be funded by
A) private borrowing. B) government borrowing. C) U.S. Treasury money creation. D) Federal Reserve money creation.