The main reason that the deficit grows in a recession is that
a. the government reacts quickly and adjusts taxes to compensate.
b. monetary policy that targets interest rates causes the costs of borrowing to fall.
c. the deficit causes the recession, and reducing the deficit cures the recession.
d. many forms of taxes act as automatic stabilizers.
D
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The world is more likely to run out of gold than it is to run out of bald eagles
Indicate whether the statement is true or false
If a good is imported into (large) country H from country F, then the imposition of a tariff in country H
A) raises the price of the good in both countries (the "Law of One Price"). B) raises the price in country H and cannot affect its price in country F. C) lowers the price of the good in both countries. D) lowers the price of the good in H and could raise it in F. E) raises the price of the good in H and lowers it in F.
Countries like _________ have no reserve requirements at all
a. England b. Canada c. Australia d. all of the above e. none of the above.
If there are no profits in competitive equilibrium, why do firms produce? How can they stay in business?