In the short-run framework, budget deficits should:
A. be run on a temporary basis whenever the economy is below potential output.
B. be run on a permanent basis since they can always be financed by printing money.
C. never be run since they slow economic growth over the long run.
D. never be run since they crowd out investment in the short run.
Answer: A
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A monopolistically competitive firm is like a monopoly firm insofar as
A) both face perfectly elastic demand. B) both earn an economic profit in the long run. C) both have MR curves that lie below their demand curves. D) neither is protected by high barriers to entry.
Use the above figure. Refer to the above diagram where curves (a) through (d) are for four different countries. Income is third most unequally distributed in
A) Country A. B) Country B. C) Country C. D) Country D.
Wendy's restaurants must decide whether to grow their own potatoes for French fries or buy them. If they buy rather than grow, then they have opted to
a. integrate horizontally b. allow market prices to guide resource allocation c. integrate vertically d. allow hierarchical control to guide resource allocation e. form an authority relation
An upward shift of the consumption function might be caused by:
a. an increase in disposable income. b. a decrease in disposable income. c. a decrease in the price level. d. a decrease in household wealth. e. an increase in the interest rate.