A fiscal policy that changes over time as economic conditions change is considered to be time inconsistent
a. True
b. False
Indicate whether the statement is true or false
True
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Given below are the current account transactions of an economy in a year
a. exported goods and services worth $120 billion b. imported goods worth $200 billion c. revenue earned from manufacturing plants situated abroad equals $80 billion d. dividend paid to foreign investors equals $10 billion e. donations and disaster relief funds given to a foreign country equal $10 billion f. received "gifts" worth $5 billion from foreign donors towards poverty alleviation i) Calculate the economy's trade balance. ii) What will be the balance in the economy's current account?
The marginal social cost is
A) equal to the marginal private cost plus the marginal external cost. B) equal to the marginal private cost minus the marginal external cost. C) the same as the marginal private cost. D) the same as the marginal external cost.
A firm that is a monopolist in the output market and a monopsonist in the input market
A) will hire the same amount of labor as if perfect competition prevailed in both markets, but pay a lower wage. B) will restrict the level of output but not that of employment compared to the perfectly competitive case. C) will hire less labor but pay the same wage compared to the perfectly competitive case. D) will hire less labor and pay a lower wage compared to the perfectly competitive case.
Explain the importance of the shape of supply curve for undertaking stabilization policies