Which of the following statements best describes the reaction of the private sector to government budget deficits and surpluses?
a. In practice, the private sector only sometimes adjusts its savings behavior to offset government budget deficits and surpluses.
b. In practice, the private sector only partially adjusts its savings behavior to offset government budget deficits and surpluses.
c. In practice, the private sector only sometimes and partially adjusts its savings behavior to offset government budget deficits and surpluses.
d. In practice, the private sector does not adjust its savings behavior to offset government budget deficits and surpluses.
c. In practice, the private sector only sometimes and partially adjusts its savings behavior to offset government budget deficits and surpluses.
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Based on your understanding of your roommate's preferences, you predict that he will select the spaghetti for his lunch at the cafeteria, but instead he chooses the gyros. How do you describe this event in terms of economic theory?
A) Your roommate is irrational. B) Your roommate does not know what is in his own best interests. C) You roommate does not know his own preferences as well as you do. D) You constructed a model that made a prediction, and the prediction was refuted.
The largest single expenditure component of GDP is: a. consumption
b. investment. c. government purchases. d. net exports.
When the tax to fund a government project is allocated among voters in proportion to the benefits they receive from the project,
a. productive (efficient) projects will tend to be opposed by a majority of voters. b. counterproductive (inefficient) projects will often be favored by a majority of voters. c. projects that are productive (efficient) will tend to be favored by an overwhelming majority of voters. d. democratic political decision making can be expected to work poorly.
Richard loses his job at the microbrewery due to a downturn in general business conditions. He is experiencing
A. structural unemployment. B. cyclical unemployment. C. seasonal unemployment. D. frictional unemployment.