The use of fiscal policy to stabilize the economy is limited because
A) changes in government spending and tax rates have a small effect on aggregate demand.
B) changes in government spending and tax rates have a small effect on interest rates.
C) the legislative process can be slow, which means that it is difficult to make fiscal policy actions in a timely way.
D) the Internal Revenue Service (IRS) resists changes in tax rates because of all the changes they would have to make to the tax code.
Answer: C) the legislative process can be slow, which means that it is difficult to make fiscal policy actions in a timely way.
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A market structure in which two firms control the market is a
a. monopoly. b. monopolistic competition. c. perfect competition. d. duopoly.
The evidence indicates that during the 1770s, the American colonists were
(a) among the most heavily taxed people in the European world. (b) among the most lightly taxed people in the European world. (c) taxed at a rate that was similar to other people in the European world. (d) taxed at rates that can't be compared to other rates due to lack of data.
A nation practicing mercantilism aims to
a. keep the government out of the economy. b. establish an excess of exports over imports. c. balance imports with exports. d. replace gold and silver with paper money. e. reduce the size of the military sector.
When economists discuss the “efficiency” of a market economy, they are referring to ______.
a. the size of the economic pie b. how income is distributed c. its annual productivity rate d. the effectiveness of incentives