Economists believe that an increase in equilibrium income can eliminate a cyclical deficit but cannot eliminate a structural deficit.
Answer the following statement true (T) or false (F)
True
An increase in equilibrium income will raise tax revenues and reduce government spending on income-support programs, both of which reduce the cyclical deficit. The structural deficit is not affected by such changes because it is not a function of equilibrium income.
You might also like to view...
Aimee sells hand-embroidered dog apparel over the Internet. Her annual revenue is $128,000 per year, the explicit costs of her business are $42,000, and the opportunity costs of her business are $30,000. What is her accounting profit?
A) $12,000 B) $56,000 C) $86,000 D) $98,000
When a game has multiple equilibria, a useful method to sort out which one would be the "best" prediction is to
a. find the one (if any) in which both players are better off than in any other equilibrium. b. find the equilibrium that is symmetric, if any. c. find the one which seems "focal", if any. d. all of the above.
Which of the following is true of a firm that can successfully practice price discrimination?
a. Its total revenue is often reduced. b. It appropriates a part of the consumer surplus. c. It has no way of distinguishing between types of customers. d. It has no market power in the industry. e. It must be a perfectly competitive firm.
Think about cost structures associated with each of the following and decide which is most likely not to be a natural monopoly
a. personal computer company b. electric company c. cable television company d. water company e. local telephone company