Which of the following helped the U.S. economy recover following the recession of 2001?
a. The U.S. government increased spending to fight the war on terror.
b. A series of corporate scandals decreased consumer confidence.
c. The U.S. government increased interest rates to boost saving.
d. Consumers rapidly increased their purchases and increased aggregate demand.
a. The U.S. government increased spending to fight the war on terror.
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A prediction of the Ricardo-Barro effect is
A) a larger decrease in the real interest rate when the government runs a budget surplus. B) no effect on the real interest rate when the government runs a budget deficit. C) a larger decrease in investment when the government runs a budget deficit. D) a larger increase in the real interest rate when the government runs a budget deficit. E) a larger decrease in investment when the government runs a budget surplus.
The three components of consumption are durable goods, nondurable goods, and housing construction
Indicate whether the statement is true or false
Refer to Figure 5.2, which shows a family of average cost curves. The average fixed cost at a given level of output is represented by:
A. the vertical distance between Curve 1 and Curve 2 at a given level of output. B. the vertical distance between Curve 1 and Curve 3 at a given level of output. C. the vertical sum of Curve 1 and Curve 2 at a given level of output. D. the vertical sum of Curve 1 and Curve 3 at a given level of output.
Suppose that there are two firms, each generating three tons of SO2. Suppose also that the government has set a target abatement level of two tons. Under a policy of uniform abatement with permits, the firm with the lower marginal abatement cost:
A. will abate exactly the same amount of SO2 as the firm with the higher marginal abatement cost. B. will abate less SO2 than the firm with the higher marginal abatement cost. C. will abate more SO2 than the firm with the higher marginal abatement cost. D. will sell its pollution permit to the firm with the higher marginal abatement cost.