What two fiscal policy measures do you recommend to remove it?
raise taxes; lower G
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"Privatization of government owned industries is a more desirable way to operate an economy" is a ________ statement about ________ policy.
A. normative; monetary B. positive; structural C. normative; structural D. positive; fiscal
In an economy, for every $10 million increase in disposable income, saving increases by $2 million. It can be concluded that the
A. average propensity to save is 0.2. B. marginal propensity to consume is 0.2. C. slope of the saving schedule is 2. D. slope of the consumption schedule is 0.8.
Consider a monopolistic competitor who earns high profits in the short run. Which of the following changes will be observed in the demand curve faced by this firm in the long run?
a. The demand curve will become vertical. b. The demand curve will become steeper. c. The demand curve will become flatter. d. The demand curve will slope upward.
Suppose that each serving of Mac & Cheese costs $0.50 to make no matter how many servings are produced. This means that the price elasticity of supply for Mac & Cheese is ________ and the supply curve is ________.
A. infinite; perfectly elastic B. zero; perfectly elastic C. infinite; perfectly inelastic D. one; perfectly inelastic