When the government runs a budget surplus, it uses the funds to:
A. pay down outstanding debt.
B. decrease public saving.
C. decrease transfer payments.
D. issue bonds.
Answer: A
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The long-run Phillips curve is a vertical line because
A) there is no relationship between the natural unemployment rate and the inflation rate. B) real GDP does not depend on the unemployment rate. C) in the long run, the natural unemployment rate increases when inflation increases. D) the unemployment rate decreases when the inflation rate increases. E) the natural unemployment rate only depends on the inflation rate.
Refer to Figure 12-20. If the market price is P1, what is the allocatively efficient output level?
A) Q0 B) Q1 C) Q2 D) There is no allocatively efficient output level because the firm is making a loss.
Which of the following is a source of market power for a monopolist?
a. a firm may have a patent or copyright b. a firm may control critical resources c. a firm may have a government-authorized franchise d. a firm may enjoy economies of scale e. all of the above are sources of market power for a monopolist
The GDP gap tends to increase when the economy shifts into recession
a. True b. False Indicate whether the statement is true or false