One drawback in using fiscal policy as a stabilization tool is that fiscal policy:
A. effects are frequently offset by automatic stabilizers.
B. affects potential output as well as planned aggregate expenditure.
C. is too flexible to use to close output gaps.
D. is not useful for dealing with prolonged episodes of recession.
Answer: B
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In 2011, Armenia had a real GDP of approximately $4.21 billion and a population of 2.98 million. In 2012, real GDP was $4.59 billion and population was 2.97 million. From 2011 to 2012, Armenia's standard of living ________
A) increased B) decreased C) did not change D) might have increased, decreased, or remained unchanged but more information is needed to determine which
Having worked for many of the firms in the petroleum industry, you know that the price elasticity of demand for a representative firm is about ?1.25. Moreover, a recent report from an economist in your office revealed that the price elasticity of demand for the petroleum products sold by your firm is ?1.5. Based on this information, you know that the Rothschild index is:
A. 1.20. B. ?1.20. C. 0.833. D. ?0.833.
Increases in the marginal propensity to consume (MPC), other things constant, _____
a. increase the value of the multiplier b. decrease the value of the multiplier c. increase the marginal propensity to save d. shift the aggregate expenditure curve downward e. cause a downward movement along the aggregate expenditure curve
Property rights allowing individuals to own goods, services, and factors of production are most important in:
a. capitalistic economies. b. socialistic economies. c. planned economies. d. command economies.