When the economy begins to slip into a recession, the automatic stabilizers cause
A. transfer payments to increase and tax collections to decline.
B. tax rates to increase so that tax revenues will remain relatively stable.
C. interest rates to decline.
D. a movement toward a budget surplus.
A. transfer payments to increase and tax collections to decline.
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Which of the following is a true statement about the multiplier?
A) The multiplier is a value between zero and one. B) The smaller the MPC, the larger the multiplier. C) The multiplier rises as the MPC rises. D) The multiplier effect does not occur when autonomous expenditure decreases.
When government intervenes in the production process because external costs exist, it typically attempts to shift the industry's
A) demand curve to the right. B) demand curve to the left. C) supply curve to the right. D) supply curve to the left.
An increase in consumer wealth shifts the consumption function downward
a. True b. False Indicate whether the statement is true or false
Suppose a monopolist chooses the price and production level that maximizes its profit. From that point, to increase society's economic welfare, output would need to be increased as long as
a. average revenue exceeds marginal cost. b. average revenue exceeds average total cost. c. marginal revenue exceeds marginal cost. d. marginal revenue exceeds average total cost.