According to Milton Friedman, the short-run trade-off between unemployment and inflation comes from unanticipated inflation
a. True
b. False
Indicate whether the statement is true or false
True
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One reason why the government may not choose to close a recessionary gap by raising both taxes and spending and thereby keeping the budget balanced is because it
a. leaves undone the problem of unemployment b. can create inflation c. may involve raising taxes too high for political comfort d. eventually leads to deficit budgets e. does not impact on aggregate demand which is where the problem lies
A major problem with the negative income tax is that
a. low tax rates imply low break-even incomes. b. low tax rates imply high break-even incomes. c. high tax rates imply low minimums. d. All of the above are correct.
According to the Keynesian view, which of the following would most likely stimulate real output if an economy were in a recession?
What will be an ideal response?
If Farmer Sam MacDonald can produce 200 pounds of cabbages and 0 pounds of potatoes or 0 pounds of cabbages and 100 pounds of potatoes and faces a linear possibilities curve for his farm, the opportunity cost of producing an additional pound of cabbage is ____
A) 1/2 B) 2 C) 100 D) 200