A good way to encourage agricultural production is to
a. encourage farmers to work harder
b. subsidize input prices for farmers
c. permit farm prices to rise with increasing demand
d. create a monopoly firm to buy all farm output
e. all of the above
C
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The income of a consumer is $40, the price of A is $8, and the price of B is $4. If the quantity of A is measured vertically, then the slope of the budget line is:
A. 0.5 B. 1.0 C. 2.0 D. 2.5
Which of the following is TRUE for a profit maximizing monopolist?
A) Marginal cost is always less than average total cost. B) In the long run, the firm's economic profit equals zero. C) In the short run, the firm will shut down if its marginal cost is less than its average variable cost. D) In the short run, the firm can make an economic profit even if its marginal cost is less than its average variable cost.
Starting from a balanced budget, which of the following would NOT cause a deficit?
A) A decrease in taxes B) An increase in spending of goods and services C) An increase in transfer payments D) A 50 percent increase in spending accompanied by a 40 percent increase in taxes E) None of the above.
According to the Taylor rule, the Federal Reserve ________ the real interest rate as the output gap increases and ________ the real interest rate as the inflation rate increases.
A. lowers; raises B. raises; raises C. lowers; lowers D. raises; lowers