The economic problem can best be stated as:
A. Given the fact that the economy is inefficient, how much and what type of government intervention should be used to improve the efficiency of the economy?
B. What is the best rate of economic growth for a society?
C. Given scarce resources, how exactly do societies go about deciding what to produce, how to produce it, and for whom to produce?
D. How can the economy improve technology so as to shift the production possibility frontier up and to the right?
Answer: C
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The three ways of reducing a government budget deficit are to
A) decrease government spending, reduce consumption, increase the tax rate. B) increase government spending, decrease real income, reduce the tax rate. C) decrease government spending, increase real income, reduce the tax rate. D) decrease government spending, increase real income, increase the tax rate.
Suppose Fiona's base consumption equals $1,000 per month when her income is zero. Fiona earns $5,000 per month, and her marginal propensity to consume is 0.8 . If her monthly income increases by $1,500, her total consumption will be _____
a. $8,400 b. $10,000 c. $6,200 d. $4,800
In the open-economy macroeconomic model, the supply of loanable funds comes from
a. the sum of domestic investment and net capital outflow. b. net capital outflow alone. c. domestic investment alone. d. None of the above is correct.
Figure 4-20
Refer to . The burden of the tax on buyers is
a.
$1.00 per unit.
b.
$1.50 per unit.
c.
$2.00 per unit.
d.
$3.00 per unit.