Suppose that the economy is currently at full employment. All other things being equal, if central bank implements contractionary policy, then the appropriate fiscal policy is to
a. increase taxes.
b. reduce government spending.
c. balance the budget.
d. increase a budget deficit.
d
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An upward sloping indifference curve defined over two goods violates which of the following assumptions from the theory of consumer behavior?
A) transitivity. B) preferences are complete. C) more is preferred to less. D) all of the above E) none of the above
If incomes decrease in the United States, Americans will buy more goods, including foreign goods. This increase in demand for foreign goods will cause an increase in the demand for euros
a. True b. False Indicate whether the statement is true or false
The difference between M1 and M2 is given by which of the following?
a. M1 is limited to checkable deposits, whereas M2 contains currency. b. M1 is made up of currency and checkable deposits, whereas M2 contains M1 plus savings deposits and small time deposits. c. M1 includes only currency, whereas M2 contains M1 plus checkable deposits. d. M1 includes currency, coins, gold and silver, whereas M2 does not contain gold and silver.
For an economist to say that too little of the good is produced, what must be true?
A. The consumer surplus plus the producer surplus must be smaller than it could be. B. The producer surplus must be smaller than optimal. C. The consumer surplus must be larger than optimal. D. The consumer surplus must be smaller than optimal.