If the price of an inferior good rises, the income effect will result in households buying ________ of the good and the substitution effect will result in households buying ________ of the good.
A. more; more
B. more; less
C. less; more
D. less; less
Answer: B
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Which of the following is NOT a problem in following an activist policy?
A) ineffectiveness in fiscal policy B) lags in the effects of policies C) multiplier uncertainty D) forecasting errors
A recessionary real shock will:
a. shift the aggregate demand curve to the left and reduce real GDP. b. shift the aggregate demand curve to the right and increase real GDP. c. shift the aggregate supply curve to the left and increase real GDP. d. shift the aggregate supply curve to the left and reduce real GDP. e. shift the aggregate supply curve to the right and increase real GDP.
Most economists _________ tariffs and _________ quotas.
A. favor; favor B. oppose; oppose C. favor; oppose D. oppose; favor
Answer the next question using the following budget information for a hypothetical economy. Assume that all budget surpluses are used to pay down the public debt. Government SpendingTax RevenuesGDPYear 1$450$425$2,000Year 25004503,000Year 36005004,000Year 46406205,000Year 56805804,800Year 66006205,000A budget surplus occurred in
A. Year 2. B. Year 3. C. Year 4. D. Year 6.