The balanced-budget multiplier
A. equals 1.
B. is greater than 1.
C. is greater than 0 but less than 1.
D. equals 0.
Answer: A
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Consider two countries-country A and B. Both countries are exactly similar in all aspects except for one. In country B it is possible for entrepreneurs to borrow money from banks and financial markets
While in country A, there is no loan for entrepreneurshiA) Country A is likely to grow faster than country B. B) Country B is likely to grow faster than country A. C) Both countries are likely to grow at the same rate. D) Resources are likely to be over consumed in country A and under consumed in country B.
In the above figure, the short-run equilibrium will eventually adjust to a long-run equilibrium with a
A) lower price level and smaller real GDP B) higher price level and larger real GDP. C) higher price level and smaller real GDP. D) lower price level and larger real GDP.
The above table gives some cost data for Peter's Pickles. Peter's fixed cost is $20. Average variable cost (AVC) is lowest when output is equal to
A) 1 barrel of pickles. B) 2 barrels of pickles. C) 3 barrels of pickles. D) 4 barrels of pickles.
The existence of a union
A) has no effect on labor supply and demand. B) affects labor supply only. C) affects labor demand only. D) can affect both labor supply and labor demand.