The circular flow model:
A. illustrates how natural resources are created.
B. illustrates how money is created by the banking system.
C. assumes that central planning is taking place.
D. illustrates the interdependence of businesses and consumers.
Answer: D
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If both rich and poor families pay 25 percent of their income in taxes, the tax scheme is ________
A) proportional B) regressive C) negative D) progressive
Figure 5-6
A shift in the budget line in Figure 5-6 from AB to AC indicates
a.
the price of wine coolers has risen.
b.
income has increased.
c.
the price of beer has fallen.
d.
the price of wine coolers has fallen.
e.
All of the above are correct.
In year 1, the actual budget deficit was $150 billion and the cyclically adjusted deficit was $125 billion. In year 2, the actual budget deficit was $125 billion and the cyclically adjusted deficit was $100 billion. GDP was $1000 billion in year 1 and $1005 billion in year 2. It can be concluded that fiscal policy from year 1 to year 2 was:
A. proportional. B. expansionary. C. contractionary. D. progressive.
When MC is rising but still below AVC, then
A. AVC is declining. B. AVC is constant. C. AVC is rising. D. There is not enough information to determine what AVC is doing.