The use of discretionary fiscal policy is hampered by i. difficulty of estimating the level of potential GDP. ii. lack of accuracy of economic forecasts. iii
the small impact tax cuts and increases in government expenditure have on aggregate demand. A) i only
B) ii only
C) iii only
D) i and ii
E) i, ii, and iii
D
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Any production point outside the production possibilities frontier is
A) unattainable. B) associated with unused resources. C) attainable only if prices fall. D) attainable only if prices rise.
A decrease in total revenue will result if
A) demand is inelastic and price increases. B) demand is elastic and price decreases. C) demand is inelastic and price decreases. D) demand is unitary elastic and price decreases.
In the early colonies, private landholdings
a. gradually replaced common ownership. b. occasionally supplemented common ownership. c. were only legalized after 1650. d. were the norm from the very beginning of colonization.
Which of the following statements correctly summarizes a difference between the layperson's and the economist's views of the net benefits of trade?
A. Economists focus on trade in manufactured goods while laypeople also focus on trade involving the services of people who manage the trade. B. Economists often argue that the gains from trade in the form of low consumer prices tend to be widespread and not easily recognizable while the costs in jobs lost tend to be concentrated and readily identifiable. C. Economists often argue that most U.S. jobs are at risk of outsourcing while laypeople intuitively recognize that inherent in comparative advantage is that each country has a comparative advantage in the production of some good. D. Economists most often argue that the costs of trade outweigh the benefits while laypeople often argue that the benefits of trade outweigh the costs.