The issue of fairness versus efficiency arises
a. only in a command economy.
b. only in a market economy.
c. in neither a command nor a market economy.
d. in both a command and a market economy.
d
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Autonomous expenditure includes
A) consumption expenditure, investment, and net taxes. B) investment, government expenditure on goods and services, and exports. C) consumption expenditure, investment, and imports. D) investment, government expenditure for goods and services, and imports. E) consumption expenditures, investment, and exports.
Which of the following statements is FALSE?
A) Fiscal policy is the attempt to influence the economy using taxes, transfer payments, and government expenditures. B) Government expenditure affects aggregate demand directly because government expenditure is a component of aggregate demand. C) Taxes and transfer payments affect aggregate demand by changing disposable income. D) An increase in disposable income leads to a decrease in aggregate demand.
Assume that at the current market price, a perfectly competitive firm's profit-maximizing level of output yields total revenues that are just equal to total costs. Which of the following statements applies to this firm?
A) The firm should shut down right now. B) The firm should continue to operate in the short run to minimize losses, but shut down if things don't improve over the long run. C) The firm is earning zero economic profit and should continue to operate. D) The firm should increase its explicit costs to reduce its tax burden.
Which of the following best represents government saving?
A) T - (G + TR) B) (Y - TR) + I C) (Y - C - G - NX) D) (Y + TR - T) + C