U.S. automobile manufacturers chose not to switch to producing subcompact cars for which of the following reasons?
(a) They did not perceive the U.S. demand for subcompacts as permanent.
(b) This switch was not economically feasible in the long run.
(c) Government policy prevented them from doing so.
(d) All of the above.
(a)
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When each of two countries can produce one good with fewer resources than the other, each is said to have an absolute advantage in that good
Indicate whether the statement is true or false
In a negative income tax program,
a. the government guarantees a minimum level of family income b. a family must pay income taxes on its welfare check c. a family receives a fixed amount of money from the government and its members can keep all income earned through work d. the government reduces the welfare payment by any income earned through work e. a family's income is lower if its members work
Which of the following programs are in cash?
A. AFDC/TANF B. AFDC/TANF and EITC C. WIC D. EITC
Answer the following statements true (T) or false (F)
1) An increase in a lump-sum tax has the same effect on equilibrium GDP as an equal decrease in government purchases. 2) If the government increases its purchases by $200 billion but at the same time raises lump- sum taxes by $200 billion, then equilibrium GDP will remain constant. 3) A decrease in taxes will have a larger effect on equilibrium GDP if the marginal propensity to consume is smaller. 4) A recessionary expenditure gap is the amount by which aggregate expenditures must increase in order to reach the full-employment level of GDP.