In which of the following ways is the private market sector similar to the public sector in terms of decision making?
A) Prices determine the demand for goods and services in each sector.
B) There is competition for scarce resource in both sectors.
C) Both sectors may use a type of "force" if necessary.
D) Votes by individual voters are basically equal in importance with dollars spent by individuals on goods.
Answer: B
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An example of a deficit item on the U.S. balance of payments is
A) the sale of a spark plug made by a U.S. firm in Michigan to a Nissan plant in Tennessee. B) the purchase of Japanese yen by a U.S. firm. C) a deposit in a bank in Chicago by the government of Saudi Arabia. D) the payment of a dividend by a British firm to a U.S. family.
What does it mean if a person makes a "decision at the margin"?
A) The person compares additional benefits and additional costs when deciding what to do. B) The person weighs the good against the bad and then decides what to do. C) The person is more likely to say yes than to say no. D) The person compares marginal benefits and total costs and then decides what to do. E) The person makes a decision based on a condition.
Which of the following statements is incorrect?
A. Given the economy's MPS, a $15 billion reduction in government spending will reduce the equilibrium GDP by more than would a $15 billion increase in taxes. B. Other things unchanged, a tax reduction of $10 billion will increase the equilibrium GDP by $25 billion when the MPS is .4. C. If the MPC is .8 and GDP has declined by $40 billion, this was caused by a decline in aggregate expenditures of $8 billion. D. A government surplus is anti-inflationary; a government deficit is expansionary.
Which of the following is not part of the "individual mandate" provision of the Patient Protection and Affordable Care Act (ACA)?
A) Individuals are allowed to opt out of the insurance program if they can prove they have no serious health issues. B) In 2017, fines for not having health insurance are the greater of $695 per person or 2.5 percent of income. C) Individuals who do not acquire health insurance will be subject to a fine. D) With limited exceptions, every resident of the United States is required to have health insurance that meets certain basic requirements.