The government is able to alter the outcome of the three basic economic questions (what? how? and for whom?) by ______________, _________________, and ___________.
Fill in the blank(s) with the appropriate word(s).
taxing; spending; regulating (any order)
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Refer to Figure 3.1. Which of the following is true concerning Alvin's marginal rate of substitution?
A) It is diminishing. B) It is positive but varies along the indifference curve. C) It is constant. D) It is zero.
Trade-offs are involved in most policy decisions
a. True b. False Indicate whether the statement is true or false
Suppose that in an economy with lump-sum taxes and no international trade, autonomous investment spending increases by $2 million. If the marginal propensity to consume is 0.75, equilibrium gross domestic product will change by a maximum of
A) $0.5 million B) $1.5 million C) $2.0 million D) $8.0 million E) $15.0 million
In the graph above, draw a supply curve, S1, and then draw a less elastic supply curve, S2.
