If government expenditures are increased by $50 billion, assuming all other factors stay constant, we would expect real GDP in the long run to
A. increase by more than $50 billion.
B. stay constant.
C. increase by $50 billion.
D. increase by less than $50 billion.
Answer: A
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Figure 5-3
In Figure 5-3, a decline in price from 3 to 1 will increase market quantity demanded by
A. 30. B. 40. C. 50. D. 60.
A person with AIDS has a guaranteed right to apply for health insurance and receive coverage at the same rate as a healthy person. What is the likely result for the insurance company?
a. Rational ignorance b. The principle-agent problem c. The substitution effect d. Externalities e. Adverse selection
The slower the marginal utility declines as more of a good is consumed the:
A. larger the opportunity cost of the good. B. smaller the elasticity of demand. C. smaller the opportunity cost of the good. D. greater the elasticity of demand.
One difference between sales and excise taxes is that:
A. sales taxes are only applied at the state level, while excise taxes are only applied at the federal level. B. excise taxes apply to a wide range of products, while sales taxes apply only to a select list of products. C. sales taxes are calculated as a percentage of the price paid, while excise taxes are levied on a per-unit basis. D. excise taxes are calculated as a percentage of the price paid, while sales taxes are levied on a per-unit basis.