A problem when implementing countercyclical fiscal policy is
a. knowing where the turning point is
b. defining the accelerator
c. identifying which multiplier to use
d. knowing when the balanced budget multiplier equals 1.0
e. finding the natural unemployment rate
E
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Refer to Figure 4-6. What area represents producer surplus at P2?
A) A + B + D B) B + D + G C) B + C + D + E D) B + D
A $100 billion increase in government purchases would:
a. increase AD by $500 billion if MPC = 0.8. b. decrease AD by $300 billion if MPC = 2/3. c. decrease AD by $200 billion if MPC = 0.9. d. decrease AD by $40 billion if MPC = 0.4.
Cologne is an example of a ______ good.
a. durable b. nondurable c. fixed d. nonfixed
Every point on the joint production possibilities frontier represents
A) an initial endowment. B) inefficient production. C) the marginal rate of substitution of goods for each producer. D) at least one producer specializing in production.