Economic policy in the real world reflects:
A. special interest desires only.
B. a balancing of cost/benefit analysis and special interest desires.
C. cost/benefit analysis only.
D. a complete lack of understanding of the principles of economics.
Answer: B
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If the elasticity of supply of a good is zero, then its
A) supply curve is vertical. B) supply curve is horizontal. C) demand curve must be vertical. D) supply curve is positively sloped.
Growth in a production possibilities curve diagram is shown as: a. a movement along the curve to the southeast. b. a movement along the curve to the southwest. c. an outward shift of the curve
d. an inward shift of the curve.
Higher standards of living are the result of
a. government subsidies that expand employment. b. trade restrictions that favor domestic industries over foreign competition. c. an increase in the general level of prices. d. an increase in the availability of goods and services that people value.
If the economy is expecting a severe recession, which fiscal policy would you recommend?
A. Reduce spending for welfare programs. B. Reduce overall government spending. C. Increase taxes to reduce consumption. D. Reduce personal and corporate income taxes.