A government balanced budget is
A) an excess of government spending over government revenues during a given time period.
B) a situation in which the government's spending is exactly equal to the total taxes and other revenues it collects during a given time period.
C) the total value of all outstanding federal government securities.
D) all federal government debt irrespective of who owns it.
B
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Which of the following is the Fed's best strategy for dealing with demand shocks?
a. Maintain a money supply target b. Decrease the money supply c. Maintain a passive monetary policy d. Neutralize the impact with an increase in the money supply e. Increase the interest rate
The demand for good X is estimated to be Qxd = 10, 000 ? 4PX + 5PY + 2M + AX, where PX is the price of X, PY is the price of good Y, M is income, and AX is the amount of advertising on X. Suppose the present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units. Based on this information, the cross-price elasticity between goods X and Y is:
A. 0.008. B. ?0.8. C. ?0.08. D. ?8.
A resource is said to have a comparative advantage if:
A. its suitability to the production of one good changes as it produces more of that good. B. it is better suited to the production of one good than to the production of an alternative good. C. it is equally suited to the production of all goods. D. its suitability to the production of one good does not change as it produces more of that good.