The following government policies will help achieve faster economic growth EXCEPT
A) establishing and protecting property rights.
B) improving the quality of education.
C) discouraging saving and encouraging spending.
D) encouraging research and development.
E) increasing saving.
C
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
In the income-expenditure model, equilibrium output is the level of output at which the 45-degree line intersects the planned expenditures line. Explain why this output level is an equilibrium level
Illustrate your answer with a diagram of the income-expenditure model.
Which of the following is TRUE?
I. Checks are considered money because they can be used as a medium of exchange. II. Checks represent a transfer of money. A) I only B) II only C) both I and II D) neither I nor II
A regulated firm may have an incentive to spend an inefficiently high amount on capital when:
a. it becomes deregulated. b. fair rate of return regulation is used. c. regulators set price equal to marginal cost. d. it is part of a monopolistically competitive industry. e. it is allowed to charge a monopoly price.