How do we tell whether a budget deficit needs discretionary action to remove it?
What will be an ideal response?
A budget deficit needs discretionary government action to remove it when the deficit is a structural deficit. If the deficit is a structural deficit, then even when the economy is at full employment, the deficit will remain. However, if the deficit is a cyclical deficit, then when the economy returns to full employment, the deficit will disappear.
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The income elasticity of demand is
A) positive for a normal good. B) zero for an inferior good. C) less than one for an income elastic normal good. D) Only answers A and B are correct. E) Answers A, B, and C are correct.
Lana spent $5 to see a movie. We know
A. the movie was worth 500 utils. B. Lana’s total utility from movies was $5. C. the movie was worth at least $5 worth of other goods. D. the movie increased marginal utility.
Which of the following is part of M2?
A) checks B) credit cards C) currency held inside a bank D) none of these are part of M1 or M2
Which would be a positive economic statement?
a. Government should provide free housing shelter for the homeless b. Stock prices rose to a new record last month for the fourth month in a row c. The minimum wage should be increased to give people a decent wage d. Americans should buy American products to boost the national economy