To evaluate whether a society is better or worse off than a year before, you really want to look at changes in real GDP
Indicate whether the statement is true or false
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An expenditure maximizing multi-product firm will set the same relative prices as a welfare maximizing firm
Indicate whether the statement is true or false
Which of the following statements is correct?
a. A disadvantage of a minimum-wage law is that it may benefit unskilled workers who are not low-income workers. b. A disadvantage of a negative income tax program is that a poor person who chooses not to work many hours would receive a cash benefit. c. A disadvantage of an Earned Income Tax Credit (EITC) is that a person who is unable to work due to a disability does not benefit from the program. d. All of the above are correct.
Our trade deficit is big for three main reasons: (1) ______, (2) ______, and (3) ________.
Fill in the blank(s) with the appropriate word(s).
The multiplier effect states that there are additional shifts in aggregate demand from fiscal policy, because it
a. reduces investment and thereby increases consumer spending. b. increases the money supply and thereby reduces interest rates. c. increases income and thereby increases consumer spending. d. decreases income and thereby increases consumer spending.