A major advantage of built-in or automatic stabilizers is that they
a. guarantee the federal budget will be balanced over the course of the business cycle.
b. require no Congressional action to be effective.
c. automatically produce surpluses during recessions and deficits during inflation.
d. require discretionary actions on the part of Congress before they exert an impact on output and employment.
B
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Andrew has the utility of wealth curve shown in the above figure. He owns an SUV worth $30,000, and that is his only wealth. There is a 10 percent chance that he will have an accident within a year. If he does have an accident, his SUV is worthless
What is Andrew's expected wealth? A) $30,000 B) $27,000 C) $20,000 D) zero
Ad valorem tariffs are
A) import taxes stated in ads in industry publications. B) import taxes calculated as a fixed charge for each unit of imported goods. C) import taxes calculated as a fraction of the value of the imported goods. D) the same as import quotas. E) import taxes calculated solely on the origin country.
Open market operations generally involve
A) the Fed making discount loans to depository institutions. B) the Fed buying and selling common stock in order to affect the liquidity of the stock market. C) the Fed buying and selling U.S. government securities. D) private investors buying and selling securities directly on exchanges, rather than through brokers.
According to the graph shown, if the government restricts free trade, area G represents:
This graph demonstrates the domestic demand and supply for a good, as well as a quota and the world price
for that good.
A. quota rents, which go to domestic producers.
B. quota rents, which go to foreign firms or governments.
C. government tax revenues, which go to the domestic government.
D. government tax revenues, which go to the foreign government.