All of the following contribute to greater deficits when unemployment rises and reduce the deficit during an inflationary gap except for
A. Progressive personal income taxes.
B. U.S. exports.
C. Welfare benefits.
D. Unemployment insurance benefits.
Answer: B
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James has a comparative advantage in the production of corn, while Harry has a comparative advantage in the production of bread. If James and Harry decide to trade with each other, _____
a. both Harry and James will enjoy gains from trade b. only Harry will enjoy gains from trade c. only Harry will suffer losses from trade d. only James will suffer loses from trade e. neither of them will gain from trade
Other things remaining unchanged, the flatter the aggregate supply curve:
a. the greater the expansionary effect of an increase in aggregate demand. b. the smaller the inflationary effect of an increase in aggregate demand. c. the greater the recessionary effect of a decrease in aggregate demand. d. the greater the expansionary effect of a decrease in aggregate demand. e. the smaller the recessionary effect of an increase in aggregate demand.
Explain why firms that enjoy economies of scale or scope are candidates for regulation.
What will be an ideal response?
A high Herfindahl-Hirshman Index indicates that an industry ______.
a. has a large number of firms b. is an oligopoly c. has perfect competition d. is competitive