When aggregate demand decreases rapidly, the economy is likely to experience
a. inflation.
b. an economic boom.
c. economic growth.
d. recession.
d
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A common criticism of government programs that are designed to assist the poor is that
a. those who receive assistance rarely meet the criterion for eligibility. b. the majority of those below the poverty line refuse to accept government assistance. c. they create incentives for people to become "needy." d. they typically account for a majority of annual government expenditures.
Suppose the long-run supply curve for a good is upward-sloping. The upward slope could be explained by
a. decreases in production costs resulting from more firms coming into the market. b. a breakdown of the "free entry and exit" feature of competition. c. a breakdown of the "price taking" feature of competition. d. the fact that a resource used in the production of the good is available only in limited quantities.
Automatic stabilizers are
A. tools used by the President's Council of Economic Advisers. B. provisions that cause changes in government spending and taxes without new action by Congress or the President. C. policies set by certain committees in Congress. D. provisions that cause the aggregate supply curve to be upward sloping.
Suppose that the total production of an economy consists of 10 oranges and 5 candy bars, each orange sells for $0.20, and each candy bar sells for $1.00. What is the market value of production in this economy?
A. $7.00 B. $1.20 C. $2.00 D. $5.00