Which of the following is an example of a pure public good?
A. An automobile
B. A mall
C. A teddy bear
D. An army
Answer: D
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Assuming upward sloping labor supply, wage subsidies are definitely more inefficient
A. the more elastic labor demand is. B. the more elastic labor supply is. C. the more substitutable consumption and leisure are. D. Both (a) and (b) E. Both (b) and (c) F. Both (a) and (c) G. All of the above H. None of the above
The tax multiplier is smaller in absolute value than the government purchases multiplier because some portion of the
A) decrease in taxes will be saved by households and not spent, and some portion will be spent on imported goods. B) increase in government purchases will be saved by households and not spent, and some portion will be spent on imported goods. C) decrease in taxes will be saved by households and not spent, and some portion will be spent on consumer durable goods. D) increase in government purchases will be saved by households and not spent, and some portion will be spent on consumer durable goods.
Which of the following is true about the LM curve?
a. Along the LM curve, actual expenditure is equal to planned expenditure. b. The LM curve slopes upward and is consistent with a given level of income. c. The LM cuve slopes upward for a given level of the money supply. d. The LM curve is horizontal in the classical model. e. none of the above.
When the Fed sells government bonds, the reserves of the banking system
a. increase, so the money supply increases. b. increase, so the money supply decreases. c. decrease, so the money supply increases. d. decrease, so the money supply decreases.