One characteristic of automatic stabilizers is that
A. they automatically produce surpluses during recessions and deficits during inflation.
B. they reduce the size of the public debt during times of recession.
C. they have no effect on the distribution of income.
D. they require no new legislative action by the government to have an effect.
Answer: D
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For a monopoly, a negative marginal revenue implies:
A. the price effect is larger than the quantity effect. B. total revenues are increasing. C. that the demand is price elastic. D. the quantity effect is larger than the price effect.
Which of the following statements best summarizes the essence of public choice analysis? a. Public choice analysis applies economic principles to political science issues
b. Public choice analysis applies political science principles to traditionally economic issues. c. Public choice analysis assumes that government leaders are primarily motivated by what is best for the community, unlike private interest groups. d. none of the above
Woody wants to open a pet store and needs to buy a building. Both the nominal interest rate and the inflation rate increase by 2 percent. Now, Woody a. will not buy the building. b. is more likely to buy the building
c. is less likely to buy the building. d. is just as likely to buy the building as before.
Causality is clear and mechanical with the quantity theory of money. If M increases because:
A. V and Q are variable, the price level, P, increases. B. V and Q are variable, the price level, P, decreases. C. V and Q are constant, the price level, P, increases. D. V and Q are constant, the price level, P, decreases.