Suppose the Canadian government's budget is G = $100 and T = $100 while the U.S. government's budget is G = $800 and T = $800 . We can conclude that
a. both budgets are balanced and the balanced budget multiplier in Canada is 1 while in the U.S. it is 0.8
b. both budgets are balanced and the balanced budget multiplier in Canada is 1 while in the U.S. it is 8
c. both budgets are balanced and in each case the balanced budget multiplier is 1
d. The Canadian budget is balanced, the U.S. budget isn't, and the balanced budget multiplier applies only to Canada
e. The U.S. budget is more balanced than the Canadian, and its balanced budget multiplier is higher than the Canadian's
C
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Most economists who have studied it believe that the Great Depression was caused by:
A. poor economic policymaking. B. illegal immigration. C. the stock market crash. D. a sharp decline in average labor productivity.
The reason only newly produced goods and services are counted in GDP is that ________
A) it is very difficult to impute a value to used goods B) most expenditures on used goods and services take place outside the market C) it does not help economists make better economic predictions because second-hand goods rarely have any residual value D) it allows economists to avoid double counting the production of goods and services E) none of the above
A government action that can help correct positive externalities is
A) a tax on producers of the good that provides external benefits. B) a subsidy to consumers of the good that provides external benefits. C) an effluent fee charged to producers of the good that provides external benefits. D) regulations aimed at reduced production by sellers of the good that provides external benefits.
In the short run, an unanticipated increase in the inflation rate would
A. unambiguously improve the misery index. B. increase the unemployment rate. C. decrease the unemployment rate. D. lower the natural rate of unemployment.