A recession in the United States ________ the demand for exports from Canada resulting in a reduction in Canadian autonomous expenditures and a(n) ________ output gap in Canada.
A. reduces; recessionary
B. reduces; expansionary
C. increases; expansionary
D. increases; recessionary
Answer: A
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Your neighbor likes to blast 1970's rock music and the louder the better. The loud music imposes a cost on you because it disrupts your study of economics. Let D stand for the volume of his music in decibels, B for his benefits and C for your costs, where B and C are measured in dollars. For any given volume, D, your neighbor's benefit is B = 0.63D - 0.002D2 and your cost is C = 0.06D + 0.001D2. With an efficient Pigouvian tax, how much will your neighbor pay in noise taxes?
A. $22.50 B. $23.75 C. $28.75 D. $71.25
The prisoner's dilemma is a game of strategy:
A. in which people make rational choices that lead to a less-than-ideal result for all. B. in which people make rational choices that lead to the ideal result for all. C. that leads everyone to be as well off as possible without making another worse off. D. that leads people to make irrational choices that lead to the ideal result for all.
Which of the following factors have not contributed to the "Great Moderation" of real GDP in the U.S. over the past 20 years?
a. Better inventory management b. Better macroeconomic policy c. Greater availability of financial products for lending and borrowing d. Imposition of a ceiling on interest rates e. Smaller real shocks
Business-cycle macroeconomics involves increases in Real GDP that result from a rightward-shifting LRAS curve
Indicate whether the statement is true or false