An example of discretionary fiscal policy would be
A. the existence of the progressive federal income tax.
B. an interest rate cut implemented to stimulate consumption.
C. the existence of the welfare state.
D. a federal jobs program adopted to stimulate consumption.
Answer: D
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The vertical distance between a firm's total cost (TC) and its total variable cost (TVC) curves
A) decreases as output decreases. B) is equal to the average variable cost, AVC. C) is equal to the total fixed cost, TFC. D) is equal to the marginal cost, MC.
Members of the Federal Reserve Board of Governors are:
A. Appointed by Congress to staggered 14-year terms B. Selected by the Federal Open Market Committee for 4-year terms C. Appointed by the President to staggered 14-year terms D. Selected by each of the Federal Reserve banks for 4-year terms
In the Keynesian cross diagram, the 45-degree line represents the short-run equilibrium condition that:
A. I ? I p. B. Y = PAE. C. Y* = Y. D. PAE = C + I p + G + NX.
A decrease in the demand for soft drinks due to changes in consumer tastes, accompanied by an increase in the supply of soft drinks as a result of reductions in input prices, will result in
A) a decrease in the equilibrium quantity of soft drinks and no change in the equilibrium price. B) a decrease in the equilibrium price of soft drinks and no change in the equilibrium quantity. C) a decrease in the equilibrium price of soft drinks; the equilibrium quantity may increase or decrease. D) an increase in the equilibrium quantity of soft drinks; the equilibrium price may increase or decrease.