Automatic stabilizers are so-named because
A) they are automatically undertaken by the Federal Reserve Bank to reduce budget deficits.
B) they occur automatically when real GDP changes.
C) the policy suggestions of the Council of Economic Advisors are automatically followed.
D) the policy suggestions of the Office of Management and Budget are automatically followed.
B
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The underground economy — the informal sector — can be a significant drag on the economies of developing countries. Why are firms in the informal sector often less efficient than firms in the formal sector?
What will be an ideal response?
Marginal cost is calculated for a particular increase in output by
A) dividing the change in total cost by the change in output. B) dividing the total cost by the change in output. C) multiplying the total cost by the change in output. D) multiplying the change in total cost by the change in output.
Open market operations is conducted by the ________, which is part of the Fed.
Fill in the blank(s) with the appropriate word(s).
An effective price floor on wheat will:
A. force otherwise profitable farmers out of business. B. result in a shortage of wheat. C. clear the market for wheat. D. result in a surplus of wheat.