Increases in the federal budget deficit from 2007 to 2009 were caused:
A. exclusively by the loss of tax revenue due to recession.
B. exclusively by expansionary fiscal policy, as shown through growth in the cyclically
adjusted deficit.
C. primarily by a combination of recession and expansionary fiscal policy.
D. primarily by increased outlays to a rapidly growing number of Social Security recipients.
C. primarily by a combination of recession and expansionary fiscal policy.
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Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as 
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting upward C. Short-run aggregate supply shifting downward D. Aggregate demand shifting leftward
The above figure shows the long-run cost curves for a typical firm in a competitive market. If the number of firms is unrestricted and input costs are constant, derive the long-run market supply curve
What will be an ideal response?
Which of the following is not a reason why marketable permits may fail to achieve efficiency?
a. Some firms can reduce emissions at a lower cost than other firms. b. A market with a small number of buyers and sellers. c. Imperfect information exists on the value of a permit. d. There are concerns about the value of permits in the future.
Which of the following statements suggests that a rise in GDP actually understates the rise in the standard of living? a. A much wider variety of basic products, such as food and clothing, is available today than several decades ago. b. Crime rates may rise as the GDP of a society increases
c. Crime rates may rise as the GDP of a society increases. d. Income inequality may increase with increasing GDP.