Automatic stabilizers in the economy tend to
A. overcompensate for the irregular swings in real GDP.
B. dampen the irregular swings in real GDP.
C. fully offset irregular swings in real GDP.
D. magnify somewhat the irregular swings in real GDP.
Answer: B
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Assuming price elasticity of demand is reported as an absolute value, a good with unit elastic demand has an elasticity:
A. between zero and one. B. greater than one. C. less than one, but greater than zero. D. equal to one.
Which of the following is not a source of monopoly?
a. technologies that allow each of many small firms to produce at the same per-unit costs as one large firm b. patents c. control of crucial inputs d. government licensing requirements
The Clinton Administration, faced with eight years of uninterrupted prosperity was chronically worried about inflation and thought of applying countercyclical fiscal policy but was nervous about doing so because
a. it was politically incorrect to raise taxes b. it was politically incorrect to cut government spending c. countercyclical policy had never worked before d. it didn't know where the economy would be in six months and was afraid that the countercyclical policy they would introduce would be an inappropriate one e. there was no administrative lag that it can use to implement the policy
Under the Bretton Woods exchange rate system, the U.S. government agreed to buy or sell gold at a fixed price of ________ per ounce
A) $1 B) $35 C) $100 D) $400