If an economy moves into a recession, causing that country to produce less than potential GDP, then:
a. automatic stabilizers will cause tax revenue to decrease and government spending to increase.
b. automatic stabilizers will cause tax revenue to increase and government spending to decrease.
c. tax revenue and government spending will be higher because of automatic stabilizers.
d. tax revenue and government spending will be lower because of automatic stabilizers.
a. automatic stabilizers will cause tax revenue to decrease and government spending to increase.
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An expected increase in the market price of oil in the coming year is likely to:
A) shift the supply curve of oil to the right in the current year. B) shift the demand curve for oil to the left in the current year. C) cause no changes in the demand and supply curves of oil in the current year. D) shift the supply curve of oil to the left in the current year.
The above table has the demand and supply schedules for money. Real GDP increases and, as a result, the demand for money increases by $0.1 trillion at each level of the nominal interest rate. The new equilibrium interest rate is
A) 5 percent. B) 2 percent. C) 10 percent. D) 3 percent. E) 7 percent.
In behavioral economics, the endowment effect refers to
A) most people believe that most wealthy people inherit their wealth. B) many people would be indifferent between being endowed with money or knowledge. C) many people place a higher value on what they own than when they consider purchasing. D) most people respond to tax incentives to provide an endowment for their children.
____________ is the process of making a choice between two or more alternatives
a. Bargaining b. Trading c. Decision making d. Goal setting