The income-expenditure identity for a closed economy is:
A. Y + G = C + I ? NX.
B. Y = C + I + G.
C. Y = C + I + G + NX.
D. Im ? Ex = C + I.
Answer: B
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At present, the Social Security System
A) takes in more revenue than it spends on benefits. B) takes in less revenue than it spends on benefits. C) equates the revenue that it receives and the amount it spends on benefits. D) has no idea of just how much revenue it taking in.
If the government wanted to efficiently limit the emission of carbon monoxide by all firms to exactly 4 million tons it could
A) issue rights to pollute worth 4 million tons and let the firms trade those rights in a market. B) appeal to firms' environmental conscience to pollute less. C) subsidize production. D) rely on the Coase Theorem.
You paid $35 for a ticket (which is non-refundable) to see SPAM, a local rock band, in concert on Saturday. Assume that $35 is the most you would have been willing to pay for a ticket. Your boss called, and she is looking for someone to cover a shift on Saturday at the same time as the concert. You would have to work 4 hours and she would pay you $11/hr. The psychic cost to you of working is $2/hr. What is the opportunity cost of going to the concert?
A. $1 B. $9 C. $36 D. $35
When the government deliberately alters its level of spending and/or taxes in order to achieve specific national economic goals, it is exercising
A. automatic government budgetary policy. B. a laissez-faire policy. C. discretionary fiscal policy. D. monetary policy.