The U.S. economy remains subject to frequent boom and bust cycles. Throughout U.S. history, policymakers after the Great Depression often
(a) raise or lower taxes and spending to adjust aggregate demand and thereby smooth the
business cycle.
(b) take a hands-off approach to the business cycle.
(c) consult with world organizations on how to address cyclic fluctuations.
(d) close economies to international trade.
(a)
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Which of the following is not a problem with examining the progressivity of the tax system over a lifetime?
a. The uncertainty over future tax code changes make forecasting of future taxes nearly impossible. b. Such accounting does not consider what the taxes are spent on. c. The fact that poor people do not live as long as wealthy individuals. d. Accurately estimating who is actually paying taxes.
Answer the following statement(s) true (T) or false (F)
1. Firms have an incentive to practice planned obsolescence, because it increases their volume of sales and gives them higher profits. 2. Artists as a whole would be better off if they received royalty payments each time their work was resold. 3. If an annual tax of $560 per acre is levied on land, then land values will fall by $560 per acre. 4. If water can be bottled at zero marginal cost, and if water prices are growing slower than the rate of interest, then owners would benefit by increasing their current bottling operations. 5. The market interest rate equals the absolute slope of the representative agent's indifference curve at the endowment point, minus 1.
The value of a worker's marginal product of labor:
A. only depends on a worker's stock of human capital. B. is lower for workers with more human capital. C. is not affected by a worker's stock of human capital. D. is higher for workers with more human capital.
A demand curve for a Giffen good would be
A) upward sloping. B) downward sloping. C) horizontal. D) vertical.