One way the government can boost the economy out of a recession is:
A. with public announcements telling the public to save their money.
B. by increasing government spending.
C. by setting price ceilings on most goods so people can afford them.
D. None of these will help an economy in recession.
Answer: B
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If the MPC equals 0.75, then
A) for every $100 increase in consumption, real Gross Domestic Product (GDP) increases by $75. B) for every $100 increase in real Gross Domestic Product (GDP), saving increases by $25. C) consumption is always more than real Gross Domestic Product (GDP). D) for every $100 increase in real Gross Domestic Product (GDP), saving increases by $75.
If a firm has established monitoring devices that have a 50% chance of detecting shirking, and an employee gains $5,000 from shirking, the employer can deter shirking by having employees post a bond equal to
A) $2,500. B) $5,000. C) $10,000. D) $50,000.
Which of the following was not a direct contributor to the booming housing market in the 2000s?
A. People could get mortgages with little or no money down. B. People were expecting housing prices to keep on rising. C. Lending standards became loose. D. Contractionary policy was passed in 2001.
Economic analysis is used
A) only by instructors and students in economics to understand the world. B) only by business people to raise profits. C) only by policy makers to make policy decisions. D) in all decision making.