According to most economists, fiscal policy is:
A. not an effective tool for fine-tuning the economy.
B. always ineffective because of crowding out.
C. effective only when potential output is perfectly known.
D. least useful in a serious economic crisis.
Answer: A
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Suppose that along the economy-wide rate-of-return line, the current interest rate of 8 percent causes a planned investment of $300 billion
Should the interest rate fall to 7 percent, the $300 billionth dollar of investment spending now generates a ________ rate of profit, which puts ________ pressure on investment. A) positive, downward B) positive, upward C) negative, downward D) negative, upward
A monopolist faces a demand curve that
A) is perfectly horizontal at the market price. B) is below the marginal revenue curve. C) is downward sloping. D) coincides with the industry supply.
The federal government granted 200 million acres of land to railroads. Which of the following statements presents accurate information about these land grants?
a. The railroads were required to return 1/3 of the profits from the sale of this land to the federal government. b. The alternate section provision allowed state governments to purchase portions of the land grants from the railroads at reduced prices. c. The system of land grant subsidies were difficult to eliminate because of public opposition. d. Congress required railroad companies that received land grants to transport mail, troops and government property at reduced rates.
Which of the following would increase the price of fitness equipment?
a. a reduction in consumer income b. a major study indicating that a 30-minute workout each day improved health more than was previously thought to be the case c. a decrease in the price of steel used to produce the equipment d. all of the above