Suppose the economy is operating below potential output. If policy makers try to avoid a budget deficit by raising taxes or reducing government spending, these actions would
A) make a recession worse. B) increase inflation.
C) negate the multiplier effect. D) help pull an economy out of a depression.
A
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In the loanable funds market, what will change to eliminate a shortage of loanable funds and how is the shortage eliminated?
What will be an ideal response?
If the minimum efficient scale in the production of aluminum exceeds the quantity of aluminum any individual siding producer buys, siding producers should integrate backward into aluminum production
a. True b. False
Planned investment is inversely related to the interest rate because the higher the interest rate, the higher the rate of return on investment projects
a. True b. False Indicate whether the statement is true or false
When a society cannot produce all the goods and services people wish to have, it is said that the economy is experiencing
a. scarcity. b. shortages. c. inefficiencies. d. inequities.