Contractionary fiscal policy is designed to combat demand-pull inflation and consists of a decrease in government spending and/or an increase in taxes
a. True
b. False
Indicate whether the statement is true or false
True
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Which of the following describe the United States' unemployment rate over the last 80 years?
i. The unemployment rate has decreased each year since the Great Depression. ii. The unemployment rate has averaged about 5.7 percent since 1929. iii. Job creation due to defense spending and consumer spending in the 1960s drove the unemployment rate to one of its lowest level. A) i and ii only B) ii and iii only C) i, ii and iii D) i only E) i and iii
A point inside a production possibilities frontier
A) could indicate that some resources are unemployed. B) is unattainable. C) is more efficient than points on the production possibilities frontier. D) implies that too much capital and not enough labor are being used.
Cartels display a pronounced tendency to disintegrate over time because
A) increased profits induce laziness and carelessness among cartel members. B) nobody benefits in the long run from their operation since they merely redistribute wealth. C) their operation is so blatantly contrary to the public interest. D) there are so many margins on which competition can occur.
The table above shows the distribution of income in Swacko. The government of Swacko imposes a 20 percent tax on people with the highest 40 percent of income
The government then distributes 40 percent of the tax collected to the lowest 20 percent and 30 percent to the second 20 percent and the middle 20 percent. After the redistribution, the Lorenz curve for income ________. A) is equal to the line of equality B) equals the Lorenz curve for wealth C) is closer to the line of equality D) is above the line of equality