Economic efficiency entails getting the smallest amount of output from a given level of input of scarce resources.
Answer the following statement true (T) or false (F)
False
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Suppose there are two policy options facing a vote in the Senate. In the first, government spending will increase $50 billion, while the second option is to cut taxes by $50 billion. A Keynesian economist would argue for
A) the spending option because it has a bigger impact on total spending. The spending directly raises total spending plus it works through the multiplier, while the tax cut only works through the multiplier. B) the tax option because it is easier to pass. The effects on total spending would be identical. C) the spending option because it won't affect the deficit the way the tax cut would. D) the tax option because it also affects the incentives workers face. Long-run aggregate supply will increase with the tax cut, but not with the spending increase.
An increase in the interest rate will increase the demand for loanable funds
a. True b. False Indicate whether the statement is true or false
Which of the following groups would be most adversely affected by food aid?
a. Manufacturers in the country providing aid b. Government in the country providing aid c. Government in the country receiving aid d. Citizens in the country providing aid e. Farmers in the country receiving aid
For dessert, Mac has the choice between cheesecake and apple pie. The cheesecake has a marginal utility of 50 and a price of $5, and the apple pie has a marginal utility of 30 and a price of $3 . Therefore, Mac should buy
a. the cheesecake since the marginal utility is greater b. the apple pie because its price is lower c. two servings of apple pie and no cheesecake d. four servings of cheesecake e. either the apple pie or the cheesecake, it makes no difference