A "conservative" economist who advocates an active fiscal policy would recommend
A. tax cuts during recession and reductions in government spending during inflation.
B. tax increases during recession and tax cuts during inflation.
C. tax cuts during recession and tax increases during inflation.
D. increases in government spending during recession and tax increases during inflation.
A. tax cuts during recession and reductions in government spending during inflation.
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If a perfectly competitive industry becomes a monopoly and the costs do not change, which of the following allocation of costs and benefits applies?
A) The producer benefits, but consumers and society are harmed. B) The producer and society are harmed, but consumers benefit. C) The producer and society benefit, but consumers are harmed. D) The producer is harmed, but consumers and society benefit. E) The producer, consumers, and society all benefit.
In what way can liability rules lead to a more efficient outcome?
What will be an ideal response?
If a firm increases output when MR < MC, then:
a. profit will equal zero. b. profit will increase. c. profit will decrease. d. profit will remain the same. e. the firm is minimizing losses.
A positive economic statement:
a. contains personal and social value judgments. b. is always a mathematical expression. c. should never be used by an economist. d. is proper provided the advocator is clear the position rests on personal assessment. e. is an unbiased report of the facts of the economy.