A political leader suggesting that an economic downturn will be better dealt with by allowing the built-in stabilizers to work is referring to
A. Tax policy changes.
B. Monetary policy.
C. Discretionary Fiscal Policy.
D. Nondiscretionary Fiscal Policy.
Answer: D
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Sam has $200 a month to spend on two normal goods-tanning sessions or rounds of golf. Tanning sessions are $20 each, and a round of golf is $40. Sam currently consumes six tanning sessions and two rounds of golf. If the price of a round of golf drops to $20, the income effect:
A. predicts Sam will increase his consumption of both golf and tanning sessions. B. predicts Sam will double his consumption of golf. C. predicts Sam will consume more golf and less tanning sessions. D. predicts Sam will consume less golf and more tanning sessions.
The repercussions that the money wealth and international effects have on aggregate production and aggregate expenditure cause the aggregate demand curve to become steeper than it would be without such repercussions.
Answer the following statement true (T) or false (F)
A decrease in supply will increase prices most when demand is
A. perfectly inelastic. B. unit elastic. C. inelastic (but not perfectly inelastic). D. elastic.
A wage payment system in a firm incorporates a guaranteed wage with an incentive element, provided that a certain minimum level of output is achieved. Which of the above graphs represents such a system?
A. 1
B. 2
C. 3
D. 4