Government expenditures are defined as
A) government spending on goods and services plus transfer payments.
B) the excess of total expenditures over total revenues.
C) the sum of all past borrowing by the government.
D) the excess of total revenues over total expenditures.
A
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Lucy buys only magazines and CDs. Both are normal goods. Lucy's income decreases, but the prices of magazines and CDs do not change. Marginal utility theory predicts that Lucy will ________
A) buy fewer magazines and fewer CDs B) substitute magazines for CDs C) increase her marginal utility from both magazines and CDs by buying more magazines and CDs D) buy more magazines and more CDs
Using the Keynesian model, the effect of a decrease in the effective tax rate on capital would be to cause ________ in the real interest rate and ________ in output in the long run
A) an increase; no change B) a decrease; no change C) an increase; an increase D) no change; a decrease
The deviation of unemployment from its natural rate is called cyclical unemployment
a. True b. False Indicate whether the statement is true or false
The fiscal policy target for achieving full employment when an inflationary gap exists is known as the
A. AD excess. B. Fiscal restraint. C. AD shortfall. D. Fiscal stimulus.