Suppose the economy is in a recessionary gap. If government expenditures are currently $700 billion and tax revenues are currently $450 billion, the (total) budget deficit is _____________. Assume that economists estimate that if the economy were operating at full employment then government expenditures would be $600 billion and tax revenues would be $500 billion. The structural deficit is
_________________ and the cyclical deficit is _______________.
A) $1.15 trillion; $1.1 trillion; $100 billion
B) $400 billion; $300 billion; $100 billion
C) $400 billion; $100 billion; $300 billion
D) $250 billion; $100 billion; $150 billion
D
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An expensive bottle of balsamic vinegar is an example of an ________ good, and an order of lasagna from Bella's Restaurant is an example of a(n) ________ good.
A) experience; experience B) experience; inspection C) inspection; inspection D) experience; credence
Corporations often raise funds for business activities by the sale of shares of existing common stock.
Answer the following statement true (T) or false (F)
The nation of Aquilonia has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing incense, exporting steel, and neither importing nor exporting rugs. We can conclude that Aquilonia's new free-trade policy has
a. increased consumer surplus and producer surplus in the incense market. b. increased consumer surplus in the steel market and left producer surplus in the rug market unchanged. c. decreased consumer surplus in both the steel and rug markets. d. decreased consumer surplus in the steel market and increased total surplus in the incense market.
If we were to examine the economic record of the former Soviet Union and China during the 1980s, we could reasonably conclude that
A. China was successful and the Soviet Union was not. B. The Soviet Union was successful and China was not. C. Both the Soviet Union and China were successful. D. Neither China nor the Soviet Union were successful.