The actual and cyclically adjusted budgets will be equal when:
A. the rate of inflation is zero.
B. the economy is at full employment.
C. taxes have no effect on fiscal policy.
D. the balanced-budget multiplier is 1.
Answer: B
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Total utility is maximized when a consumer has spent all of his or her income and
A) spent equal amounts on all goods. B) marginal utility is maximized. C) the total utility per dollar from all goods is equal. D) the marginal utility per dollar from all goods is equal.
Which of the following statements about winner's curse is wrong?
A) Overbidding occurs when bidders are uncertain about the true value of the good. B) The phenomenon occurs in common value auctions. C) When intelligent bidders shade their bids, sellers receive more money with a sealed-bid auction than an English auction D) The phenomenon will not occur in private value auctions.
One school of anti-trust thought argues that, rather than ensuring efficiency, anti-trust laws are really aimed at
A) protecting small independent firms against large corporations. B) outlawing all monopolies whether they perform "bad acts" or not. C) price differentiation due to differences in quality and cost. D) restricting interlocking directorates.
Which of the following did not contribute to the severity of the Great Depression?
a. a sharp reduction in the money supply during the early 1930s b. a large tax increase (to balance the budget) in the early 1930s c. substantial increases in the tariff rates on imported goods d. a reduction in government expenditures and a substantial cut in personal income tax rates during 1932 and again in 1936