Name two actions a government could take if it wants to implement a contractionary fiscal policy
What will be an ideal response?
decrease government spending, increase taxes.
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Smith and Jones comprise a two-person economy. Their hourly rates of production are shown below. CalculatorsPer HourComputersPer HourSmith10010Jones1206Suppose Smith and Jones begin by producing 16 computers and 0 calculators per hour. If they wish to produce 14 computers and 40 calculators per hour efficiently, then Smith should spend ________, and Jones should spend ________.
A. 30 minutes on each; 30 minutes on each B. 1 hour on computers; 40 minutes on computers and 20 minutes on calculators C. 1 hour on computers; 20 minutes on computers and 40 minutes on calculators D. 45 minutes on computers and 15 on calculators; 1 hour on calculators
Which of the following policies would be advocated by proponents of stabilization policy when the economy is experiencing severe unemployment?
a. a decrease in the money supply b. an increase in tax rates c. an increase in government purchases d. an increase in interest rates.
A firm should shut down in the short run if it s revenue is smaller than its variable costs.
Answer the following statement true (T) or false (F)
Assuming that charitable giving is a normal good, the income effect of a decrease in personal tax rates would lead to
A. more giving because households would have more disposable income. B. less giving because giving to charity would become more expensive relative to other goods. C. more giving because giving to charity would become less expensive relative to other goods. D. less giving because households would spend that money on luxury goods.