In the long run, total spending only influences:
A. potential output.
B. actual output.
C. productive capacity.
D. inflation.
Answer: D
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The Founding Fathers (or Founders) of the United States were
(a) pragmatic reformers, eager to assault slavery whenever political realities permitted. (b) skittish abolitionists, cautiously promoting antislavery under particular circumstances. (c) anti-abolitionists, permitting slaves to be freed only when they would reap a great advantage from emancipation. (d) not concerned with slavery, because for centuries humankind failed to recognize it as a problem.
Which of the following is not a potential problem in using corrective taxation to deal with a negative externality?
a. Measuring the cost of the externality. b. Estimating the supply curve of the externality creator. c. Determining who is responsible for the externality. d. Determining how the tax should be applied.
One of the necessary conditions for price discrimination to occur is that:
a. buyers in different markets have different elasticities of demand. b. the demand curve is upward sloping. c. buyers must be allowed to resell the good at a higher price elsewhere. d. all of these are necessary for price discrimination to occur.
Which of the following is a component of aggregate demand?
a. Transfer payments from government b. Taxation by government c. Purchases by government d. Borrowing by government e. Saving by consumers