Which of the following is an automatic stabilizer?
A. Social Security benefits
B. Military expenditures
C. Property taxes
D. Unemployment compensation
Answer: D
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The official number of poor in the United States
A) is higher today than at any other time in our history. B) has risen steadily since 1981. C) was lowest in the late 1960s. D) is lowest today.
Your friend notices that U.S. auto production and U.S. population growth have moved together over several decades. He reasons that one way to slow population growth is for the government to order the auto makers to cut back on production. You gently point out to him that he
a. is correct only when the economy is in a recession b. has mistakenly inferred causation from observed correlation c. has ignored secondary effects d. has committed the fallacy of composition e. is correct only when the United States enjoys economic growth
Which of the following is true of the consumption function? a. It becomes steeper as the income tax rate decreases
b. It becomes flatter as the income tax rate decreases. c. It shifts upward as the marginal propensity to save increases. d. It shifts downward as the expected future income increases.
Points that lie below the production possibilities curve are inefficient because:
A. producing more of one good means producing less of the other. B. more of one good could be produced without producing less of the other. C. producers face scarcity. D. too many goods are being produced.