Given our automatic stabilizers and our tax laws, __________ are virtually inevitable during recessions.
Fill in the blank(s) with the appropriate word(s).
deficits
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Which geographic coincidence affected gasoline prices the most during 2005?
A. A tsunami hit the one area in the world most responsible for producing U.S. gasoline, Indonesia. B. Two major hurricanes affected the refining intensive areas of New Orleans and Houston. C. An earthquake happened to hit the energy-sensitive areas in and around Iran. D. There were tornado related electrical outages in the industrial Midwest.
Stickiness of wages
A) is unrelated to stickiness of prices. B) reinforces stickiness of prices. C) lessens the stickiness of prices. D) may or may not reinforce stickiness of prices.
The above figure shows the payoff matrix for two firms. A chemical firm must choose between a low level of production which yields one ton of pollution into a nearby lake and a high level of production which yields two tons of pollution into the
nearby lake. A private beach on the lake must decide whether to operate or not. Increased pollution reduces the number of people who wish to visit the beach. If the chemical firm owns the lake, and the beach owner must pay $10 to keep the chemical firm at just one ton of pollution, then A) the beach shuts down and the chemical firm produces one ton of pollution. B) the beach shuts down and the chemical firm produces two tons of pollution. C) the beach operates and the chemical firm produces one ton of pollution. D) the beach operates and the chemical firm produces two tons of pollution.
Which of the following measures did President Bush adopt in 2001 to get the economy moving again?
a. A hike in the wages of workers b. A ten-year tax cut c. An increase in taxes on high-income households d. Liquidation of money supply e. A decrease in government spending