Programs that automatically increase government spending (relative to revenue) during a recession and automatically decrease government spending (relative to revenue) during an economic boom are called:
a. discretionary fiscal policy.
b. supply-side programs.
c. automatic stabilizers.
d. tax credits.
c
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If the government increases the income tax rate, consumers have:
A. less to spend and will reduce their consumption. B. more to spend and will increase their consumption. C. more to spend and will reduce their consumption. D. less to spend and will increase their consumption.
If the opportunity costs of producing a good increase as more of that good is produced, the economy's production possibility frontier will be
A. a negatively sloped straight line. B. negatively sloped and "bowed inward" toward the origin. C. negatively sloped and "bowed outward" from the origin. D. a positively sloped straight line.
Suppose two neighbors share a park. One neighbor, Al, leaves trash in the park. This bothers the other neighbor, Bert. According to Coase's Theorem, one necessary condition to alleviate the externality is that
A) Al is fined by the government. B) Al has the right to leave trash and Bert cannot do anything about it. C) Bert has the right to a clean park and Al cannot leave trash. D) Either Al or Bert owns the park.
How might government policies differ when attempting to reduce the three types of unemployment? Be specific
What will be an ideal response?