When the economy goes into a downturn what automatic stabilizer limits the downturn?
a. decreased tax revenue
b. increased military spending
c. increased unemployment benefits
d. decreased inflation rate
c. increased unemployment benefits
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How is a production indifference map helpful?
What will be an ideal response?
When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
In a market with positive externalities, the market equilibrium price will be greater than the efficient equilibrium price
Indicate whether the statement is true or false
Which is most clearly a variable cost?
A. Rent B. Wages of Production Workers C. Salaries of employees under long-term contract D. Interest payments