The structural deficit is defined as
a. that part of the deficit that is so hard to remove that it is never reduced.
b. the portion of the budget deficit that occurs because the economy is not at full employment.
c. the hypothetical deficit the economy would have under current fiscal policies if the economy were operating near full employment.
d. the actual budget deficit that exists in the economy.
c
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Physical capital is:
A. the set of skills, knowledge, experience, and talent that determine the productivity of workers. B. the skills a human being acquires that enhances the available stock of equipment. C. the stock of equipment and structures that allow for the production of goods and services. D. All of these describe physical capital.
The individual supply curve for labor is the relationship between the wage and the quantity of labor that:
A. all workers are willing to provide. B. any given worker is willing to provide. C. all firms are willing to employ. D. any given firm is willing to employ.
Suppose that the marginal propensity to save (MPS) equals 0.2. The value of the multiplier would be
A. 2. B. 1.25. C. 20. D. 5.
The supporters of a monetary growth rule believe that active monetary policy
A) stabilizes the economy, decreasing the number of recessions and their severity. B) destabilizes the economy, increasing the number of recessions and their severity. C) cannot change the inflation rate. D) cannot change real GDP.