A possible explanation for the persistence of the U.S. federal budget deficits is that:
a. it is easier politically to increase government spending than to decrease taxes.
b. it is easier politically to decrease government spending than to decrease taxes.
c. it is easier politically to increase government spending than to increase taxes.
d. the economy naturally tends toward recessions
e. the economy naturally tends toward full employment.
c
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Government stabilization policy would be unnecessary if the economy automatically gravitated toward
A. full inflation. B. full employment. C. full recession. D. an inflationary gap.
So long as marginal cost is greater than average variable cost, both average variable cost and average total cost must increase as output is increased
Indicate whether the statement is true or false
In the text, the equivalence of the goods market equilibrium in the IS model to the equilibrium in which desired investment equals desired saving is demonstrated, assuming that both government purchases and net exports are zero
Demonstrate the equivalence when both G and NX are non-zero.
Comparative advantage implies that you
A) can produce more units of a good or service than another. B) can produce a good or service at a lower opportunity cost. C) can produce goods with more capital resources. D) can produce goods with more human resources.