Critics of the Keynesian view argue that increases in government spending financed by borrowing will hamper the recovery from a recession and slow long term growth because
What will be an ideal response?
a. government spending is directed by political forces, rather than efficient cost-revenue comparisons.
c. more political spending will lead to more wasteful rent-seeking activities and less production of goods and services that people value.
d. more spending and debt will lead to higher future taxes to cover the cost of government and the interest on the debt.
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A sharp increase in the price of beef that causes consumers to switch to chicken is predicted to ________ the real wage and ________ employment of unskilled workers in a poultry processing plant.
A. increase; increase B. increase; not change C. increase; decrease D. decrease; decrease
Which of the following is a macroeconomic concept?
A) The elasticity of supply of a good B) The per capita income of a country C) The average revenue earned by a firm D) The income elasticity of demand for a good
According to the historical record of inflation since the 1300s, the inflation rate
A) became highest in the twentieth century. B) was at its lowest after Columbus arrived to America. C) was at its highest during the Industrial Revolution. D) has always been consistently high. E) was higher in the 1300s than in the 1900s.
A consumer's budget line shows
a. the utility that an individual would receive from consuming various combinations of two goods b. the combinations of two goods that an individual is able to purchase, given prices and income c. how income is influenced by prices of goods d. how changes in income affect utility e. the relationship between prices and income