The great failure of activist fiscal policy in the 1960s was its
A) timidity in the face of persistent stagnation.
B) over-reliance on tax cuts to the exclusion of government spending programs.
C) delay in reversing course as the economy became overstimulated.
D) limited role as an accommodator of an activist monetary policy.
C
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According to the Ricardo-Barro effect, if the government runs a budget deficit of $100 billion, by how much does the amount of equilibrium investment increase or decrease?
What will be an ideal response?
In the long run, the total variable cost of a firm:
a. is equal to its total fixed cost. b. is equal to its total cost. c. is equal to its average fixed cost. d. is more than its total fixed cost. e. is less than its total cost.
Which of the following is an example of a regulatory action?
a. Drivers who exceed the speed limit will pay a fine if caught. b. Automobile manufacturers are required to include built-in infant seats. c. Two firms receive $100,000 fines for engaging in a price-fixing agreement. d. A junk mail solicitor is taken to jail for mail fraud. e. The tobacco industry is required to pay for the hospital bills of a lifelong smoker who develops cancer.
If the marginal tax rate is too high, it can cause all of the following except
A. Government tax receipts to decline. B. Work effort to decrease. C. Businesses to produce more. D. The rate of saving to decline.