The cyclically-adjusted budget deficit in an economy is zero. If this economy goes into recession, then the actual government budget will be:
A. Balanced
B. In deficit
C. In surplus
D. Expanding
B. In deficit
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Consider the market for feather pillows. If there is an increase in the price of feather dusters, a substitute in production for feather pillows, then
A) there is a downward movement along the demand curve for feather pillows. B) the supply curve for feather pillows shifts leftward. C) the price of feather pillows decreases. D) the demand curve for feather pillows shifts rightward. E) the demand curve for feather pillows shifts leftward.
Critics of the current system of flexible exchange rates allege that it
a. promotes inflation b. promotes unemployment c. gives central banks too little discretion over their money supplies d. restricts the growth of developing countries e. gives too much financial power to industrial countries
In a capitalistic economic system, who owns most of the nation's resources?
A. Labor unions B. The government C. Private individuals D. No one
When Tim earned $65,000 he purchased 10 novels a year. His income has just increased to $68,000 and he plans to purchase 15 novels this year. Tim's income elasticity of demand for novels equals
A) 0. B) 0.11. C) 1.67. D) 8.87.