If the government saved during an economic boom by increasing taxes or decreasing spending, this would be:
A. contractionary fiscal policy.
B. expansionary monetary policy.
C. expansionary fiscal policy.
D. contractionary monetary policy.
Ans: A. contractionary fiscal policy.
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For a good such as food, the income elasticity is likely
A) negative. B) equal to zero. C) positive and less than one. D) positive and greater than one. E) undefined because people always buy the same amount of food.
The preceding table gives monthly production information for Peter's Peanuts, a firm in a perfectly competitive industry. The market price of peanuts is $2.00 per pound. A worker costs $1,200 per month
How many workers does Peter hire to maximize his profit? A) zero B) one C) three D) four
Which of the following is the best example of "what goods and services should be produced?"
A) the use of a capital intensive versus a labor intensive process of manufacturing textiles B) the production of SUVs versus the production of sub-compact cars C) the manufacturing of computer workstations in China or in India D) the leasing versus the purchasing of new capital equipment
The area between the market price and the supply curve provides a measure of: a. consumer surplus
b. producer surplus. c. consumer surplus plus producer surplus. d. marginal utility.