Welfare economics is the study of how
a. the allocation of resources affects economic well-being.
b. a price ceiling compares to a price floor.
c. the government helps poor people.
d. a consumer's optimal choice affects her demand curve.
a
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Which of the following is not a consequence of deflation?
A. Deflation causes uncertainty about the future. B. The threat of deflation can make people reluctant to borrow for long periods. C. Deflation causes the real value of money to fall. D. Firms may be reluctant to undertake investments for fear that the prices at which they can sell their output will drop.
Points lying _____________ the production possibilities curve represent greater, but unachievable levels of output with current inputs, than that at any point on the curve.
a. inside b. along c. outside d. the midpoint of e. at the axis of
The data for the U.S. show that investment and profits
A) have a strong negative relationship. B) are positively related during recessions, and negatively related during expansions. C) move independently. D) are positively related during expansions, and negatively related during recessions. E) none of the above
According to the Ricardian equivalence theorem, budget deficits resulting from tax cuts
A. have no effect on aggregate demand. B. affect only aggregate supply. C. increase aggregate demand. D. increase both aggregate demand and aggregate supply.