Government programs that automatically shift the government budget toward a deficit during recessions and a surplus during recoveries are called:
a. discretionary fiscal policy.
b. automatic stabilizers.
c. progressive taxation.
d. price deflators.
b
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If the Chinese currency devalues compared to the US dollar, then
a. US producers will benefit; Chinese consumers will benefit b. US producers will benefit; Chinese consumers will hurt c. US producers will hurt; Chinese consumers will benefit d. US producers will hurt; Chinese consumers will hurt
Which of the following is most important for the growth of income and full realization of an economy's potential?
a. a positive rate of time preference that motivates a high rate of current consumption b. low real interest rates c. the use of central planning to allocate investment funds d. a mechanism capable of attracting savings and channeling them into investment projects that create wealth
ABC Company incurs a cost of 50 cents to produce a dozen eggs, while XYZ Company incurs a cost of 70 cents to produce a dozen eggs. Which of the following price increases would cause both companies to experience an increase in producer surplus?
a. The price of a dozen eggs increases from 40 cents to 55 cents. b. The price of a dozen eggs increases from 55 cents to 70 cents. c. The price of a dozen eggs increases from 55 cents to 75 cents. d. All of these price increases would cause both companies to experience a loss in producer surplus.
The market equilibrium quantity:
A. is sometimes the socially optimal quantity. B. maximizes total economic surplus. C. is the socially optimal quantity. D. is not the socially optimal quantity.