Economists who believe in sound finance would say that in a recession, the government should:
A. run a budget deficit because the Ricardian equivalence theorem is true both in theory and in practice.
B. maintain a balanced budget for political and moral reasons.
C. run a budget deficit despite the truth of the Ricardian equivalence theorem.
D. maintain a balanced budget because the Ricardian equivalence theorem is true in practice.
Answer: B
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Refer to Figure 21.2. If area A = 2,000, area B = 400, and area C = 2,600, what is the Gini coefficient for Urbania (rounded to two decimal places)?
A) 0.40 B) 0.43 C) 0.67 D) 0.77
What does making decisions "at the margin" mean?
a. that people evaluate how easily a decision can be reversed if problems arise b. that people make those decisions that do not impose a marginal cost c. that people compare the marginal costs and marginal benefits of each decision d. that people always calculate the marginal dollar costs for each decision
The demand for land is upward sloping.
Answer the following statement true (T) or false (F)
The figure shows the market for books before and after a sales tax is introduced. The tax on books is ________ a book, buyers pay ________ of tax per book, and the government's tax revenue is ________ a week
A) $1.20; $0.80; $128 B) $0.80; $1.20; $12 C) $0.40; $0.40; $4 D) $1.20; $0.80; $12