If we add up all the money people spend buying final goods and services—being careful to omit spending on intermediate goods so as not to double-count—the sum will be:
A. the market value of all output sold in the economy.
B. the gross domestic product of the economy.
C. total expenditure in the economy.
D. All of these statements are true.
D. All of these statements are true.
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Market equilibrium
i. can never occur because there are always people who want a good but cannot afford it. ii. occurs at the intersection of the supply and demand curves. iii. is the point where the price equals the quantity. A) ii and iii B) i only C) ii only D) i and ii E) iii only
The price elasticity of demand ________ in value when moving downward along a ________ line demand curve
A) falls; straight B) rises; curved C) falls, curved D) rises; straight
A new member of Congress notes that "[p]ersonal income tax collections automatically fall and transfers and subsidies automatically rise as national income declines." This observation best describes how the personal income tax, transfers, and subsidies:
A. produce the cyclically adjusted budget. B. cause crowding out and reduce equilibrium GDP. C. contribute to the recognition lag with fiscal policy. D. serve as built-in stabilizers.
Examples of transfers-in-kind include
A) tax rebates on both the federal and state levels. B) taxes on alcohol and tobacco. C) food stamps. D) foreign aid.