If the federal budget goes from a budget deficit in Year 1 to a budget surplus in Year 2, does it follow that the federal government acted to raise taxes or cut government spending in Year 2?
What will be an ideal response?
No, the economy could have been in an expansion in Year 2 with GDP growing faster than anticipated. The faster growth in GDP would raise tax revenues and decrease government spending on transfer payments, decreasing the budget deficit (in this case, moving it to a budget surplus).
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Which of the following is a microeconomic topic?
i) Gas prices increase after a hurricane hits the gulf coast. ii) Xavier starts a new business designing web pages. iii) Abby decides to practice an extra hour of soccer instead of studying. A. i, ii and iii
Use the aggregate expenditures model and the following values to answer the next question.AMPCIGT$3500.75$400$400$200Determine the change in the equilibrium real GDP (find ?Y) following a decrease in government spending from 400 to 300 (?G = -$100).
A. positive $500 B. negative $400 C. positive $400 D. negative $500
How much is a bond that pays $40 in coupon payments for 2 years and $1,000 at the end of the fourth year worth if the interest rate is 4%?
A) $844.56 B) $924.56 C) $1,000 D) $1,123.2
At its long-run equilibrium level of output, the demand curve facing an individual perfectly competitive firm is tangent to its
a. total economic profit curve. b. long-run average cost curve. c. marginal cost curve. d. marginal profit curve.