A balanced budget would require that when real GDP was growing rapidly,
a. the government raise taxes or cut expenditures. This would increase the magnitude of economic fluctuations.
b. the government raise taxes or cut expenditures. This would decrease the magnitude of economic fluctuations.
c. the government cut taxes or raise expenditures. This would increase the magnitude of economic fluctuations.
d. the government cut taxes or raise expenditures. This would decrease the magnitude of economic fluctuations.
c
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Figure 6-3
In Figure 6-3(a), at any price above $6, quantity demanded
A. falls to zero. B. becomes infinitely large. C. equals price. D. equals the elasticity of demand.
When EP /P rises
A) IM will rise. B) IM will fall. C) IM may rise or fall. D) IM is not affected. E) IM and P* will both rise.
The government of a country Amenia imposes a ceiling on the price of bread. Which of the following is most likely to be true?
a. It implies that the price of bread prevalent in Amenia is higher than what the equilibrium price would have been. b. Imposing this price ceiling is likely to raise economic welfare in Amenia as the government tries to ensure that most people can at least afford bread. c. It will cause an excess demand for bread in the market. d. The market is likely to remain in equilibrium even after the price ceiling is imposed.
In a Nash equilibrium, firms are clearly strategically interdependent, and
A. they are noncooperative in determining market outcomes. B. they are dependent on differentiated goods. C. they cooperate with each other to determine market outcomes. D. they determine price in a closed auction bid system.