Which of the following is the best choice to eliminate a recessionary gap if the desired fiscal stimulus is $10 billion and the aggregate demand shortfall is $100 billion, while the MPC is 0.90?
A. Tax cut of $10 billion.
B. Tax hike of $10 billion.
C. Tax hike of $11.11 billion.
D. Tax cut of $11.11 billion.
Answer: D
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Which of the following is NOT a contributing factor into why the HPAE were able to rapidly accumulate physical and human capital?
A) A stable macroeconomic environment meant low inflation B) Loans from multilateral institutions such as the IMF, the World Bank, and regional development banks C) The demographic transition meant that the proportion of their population working was higher. D) A rapid rise in income made greater amounts of savings possible.
Firms that help corporations and governments raise money by selling stocks and bonds are known as:
A. investment banks B. thrifts C. mutual fund companies D. insurance companies
In order to maximize social welfare, a firm's production of a good should occur at the output where
A. Social marginal cost equals social marginal benefit. B. Price equals social marginal revenue. C. All pollution is entirely eliminated. D. Marginal revenue equals price.
According to Joseph Schumpeter, many Midwestern railroads:
a. were built too late and thus faced heavy competition from trucks. b. were built ahead of demand. c. were unnecessary because they followed routes already adequately served by other means of transportation. d. would have been built more quickly in the absence of government aid.