In a closed economy, a decrease in government spending while taxes remain the same will be accompanied by
A) a decrease in private investment and an increase in privates saving.
B) an increase in private investment and a decrease in private savings.
C) a decrease in private investment only.
D) an increase in private savings only.
B
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One of the most serious weaknesses in the Medicare system is that
a. patients are not able to choose their own physicians. b. the definition of an episode of illness is too restrictive. c. it provides poor insurance coverage for unusually long hospital stays. d. patients must pay a deductible every time they enter the hospital. e. Part B is voluntary.
At the point where marginal cost equals average variable cost,
a. b and c. b. marginal cost is rising. c. average total cost is at its minimum. d. average variable cost is falling. e. there is no total cost.
Government action can usually perfectly correct the market’s shortcomings.
Answer the following statement true (T) or false (F)
For a linear and upward sloping supply curve and a linear downward sloping demand curve, when the consumer has to pay a positive price for the good, the producer surplus is a
A. triangle. B. rectangle. C. four-sided figure that is a rectangle on the bottom and a right triangle on the top whose hypotenuse is the demand curve. D. four-sided figure that is a rectangle on the bottom and a right triangle on the top whose hypotenuse is the supply curve.