What effect would a Federal balanced budget requirement have on automatic stabilizers?
a. They would be stopped because in a recession automatic stabilizers increase the deficit by automatic spending.
b. They would be stopped because in a recession automatic stabilizers decrease the deficit by automatic spending.
c. They would become more important because in a recession they would increase spending and taxes automatically.
d. They would become more important because in a recession they would decrease spending and taxes automatically.
a. They would be stopped because in a recession automatic stabilizers increase the deficit by automatic spending.
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The fact that the production function relating output to capital becomes flatter as we move from left to right means that
A) the marginal product of labor is positive. B) the marginal product of capital is positive. C) there is diminishing marginal productivity of labor. D) there is diminishing marginal productivity of capital.
Which of the following is a method of reducing the poverty trap?
a. Imposing requirements for work as a condition of receiving benefits b. Ensuring that government benefits are increased gradually over time c. Reducing government benefits by an amount equal to income earned d. Providing a guaranteed minimum income for all needy recipients
Voluntary export restraints (VER):
A. have the same effect as an import ban. B. are illegal under the international trading rules. C. violate the spirit of international trade agreements. D. All of these
Refer to the information provided in Figure 4.6 below to answer the question(s) that follow.Equilibrium in this market occurs at the intersection of curves S and D.
Figure 4.6Refer to Figure 4.6. The deadweight loss due to underproduction is area [C + F] if price is
A. P1. B. P2. C. P3. D. > P3.