Which of the following is true regarding the "American Recovery and Reinvestment Plan"?
A. Critics argued that in order to pay the deficits created by the plan, the government would be forced to raise taxes and cut spending, which would reverse the boost from the stimulus.
B. The massive 2009 stimulus package was designed to jump-start the recession-bound economy.
C. Critics argued that the massive deficits generated by President Obama's plan would undermine America's financial stability.
D. All of the choices are correct.
Answer: D
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An inferior good is characterized by:
A. a positive income elasticity of demand. B. a negative income elasticity of demand. C. a negative price elasticity of demand. D. a positive price elasticity of demand.
According to supply-side theory, which of the following will shift the aggregate supply curve to the right?
A. A reduction in discrimination. B. A higher minimum wage. C. A reduction in spending on education. D. Higher marginal tax rates.
When a local casino spends millions in TV ads convincing town residents to reject another casino's bid to operate in the area, the casino is:
A. rent seeking. B. seeking rent controls. C. acting fraudulently. D. allocating resources efficiently.
An interior solution to a consumer's utility maximization problem implies
A) consuming a positive amount of all goods. B) consuming negative amounts of all goods. C) consuming less than optimal amounts of all goods. D) consuming more than an optimal amount of at least one good.