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.
Answer: B
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Saving is positive for all levels of disposable income
A) above zero. B) above where the consumption line intersects the 45-degree line. C) below where the consumption line intersects the 45-degree line. D) above where the consumption function intersects the vertical axis. E) above autonomous consumption.
Government has the power to reduce the _____ associated with air pollution by automobiles because it can force changes in car design, can impose taxes on drivers, and has the power to punish those who fail to comply
a. private cost b. transaction cost c. opportunity cost d. positive externality
A graph with a positive slope indicates that the variables depicted on the axes move in the same directions
a. True b. False Indicate whether the statement is true or false
"In two hours the polls will close. I know I should probably vote, but it is raining, and besides, there is a basketball game on TV tonight, so I'll just stay in." This person is exhibiting
A) median voter preferences. B) rational ignorance. C) decision making based on cost-benefit considerations. D) logrolling.