In terms of fiscal policy, which of the following is an example of a fiscal automatic stabilizer?
A. The rise in tax revenue that occurs as a result of growth in real GDP
B. The reduction in wages that occurs as the economy goes into a recession
C. The reduction in the money supply that occurs as banks become less willing to make loans during a recession
D. The increase in government spending that occurs as the result of new spending bills passed by Congress
Answer: A
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A change in any of the ceteris paribus conditions for demand leads to a
A) a good going from an inferior good to a normal good. B) movement along the demand curve. C) shift of the demand curve. D) change in supply.
Fiscal policy may end up being destabilizing to an economy because
A) there is never a long enough time lag. B) the economy is almost always at full employment. C) the President may have different goals than Congress. D) various time lags associated with fiscal policy cause the policy changes to take effect too late to solve the problem it was supposed to solve.
Jennifer has just finished high school and is deciding whether to start working or go to college. She has already been offered a job that pays $35,000 a year. Four years of college will cost $12,000 each year. She would earn an extra $20,000 each year after she graduates for the 45 years she plans on working until she retires. Assume that the interest rate is 8.5%. What is Jennifer's opportunity cost of one year of college?
A. $12,000 B. $17,000 C. $35,000 D. $47,000
Refer to the information provided in Figure 8.4 below to answer the question(s) that follow. 
Figure 8.4 Refer to Figure 8.4. Micro Oven's average fixed costs of producing twelve units of output are
A. $41.67. B. $25.00 C. $16.67. D. indeterminate from this information.