The total change in aggregate spending generated by increased government spending depends on the
A. AD shortfall.
B. AD excess.
C. Size of the recessionary GDP gap.
D. Marginal propensity to consume.
Answer: D
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The impact of monetary policy on prices and output depends on the
A. regulations passed by Congress. B. cooperation from business leaders. C. slope of the aggregate demand curve. D. slope of the aggregate supply curve.
Risk diversification refers to the process by which:
A. insurance companies change the risk aversion of their clients. B. insurance companies reallocate the likelihood of catastrophes happening. C. people organize themselves in a group to collectively absorb the cost of the risk faced by each individual. D. risks are shared across many different assets or people, reducing the impact of any particular risk on any one individual.
Which of the following is not correct?
a. Unions are exempt from U.S. antitrust laws. b. The Wagner Act of 1935 prevents U.S. employers from interfering when workers try to organize unions. c. The National Labor Relations Board is the U.S. government agency that enforces workers' right to unionize. d. Right-to-work laws prevent firms from hiring permanent replacements for workers who are on strike.
Government intervention is sometimes used to reduce the external costs of production.
Answer the following statement true (T) or false (F)