Expansionary fiscal policy during a recession is most effective when it
a. creates jobs, even if they are on unproductive projects.
b. directs the economy to full employment and resources into productive projects.
c. substantially changes the composition of aggregate demand.
d. provides members of Congress with large political contributions.
B
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Answer the following statements true (T) or false (F)
1. If a firm cannot make a profit under conditions of perfect competition, it should shut down as soon as possible. 2. Allocative efficiency occurs when firms are producing the goods consumers most want and consumers pay a price equal to marginal cost. 3. Consumer surplus is the area above the demand curve and below the equilibrium price. 4. Producer surplus is the difference between the price the firm is willing to sell its goods and the price it actually receives.
Which of the following appears as an asset on the Federal Reserve's balance sheet?
A) Capital accounts B) U.S. Treasury deposits C) U.S. government securities held under repurchase agreements D) Federal Reserve notes outstanding
That part of disposable income not spent on consumption is defined as:
a. transitory disposable income. b. permanent disposable income. c. disposable income. d. autonomous consumption. e. saving.
When labor is the only input a firm uses, the marginal cost of a unit of output can be defined as the
a. marginal revenue multiplied by the wage. b. marginal product of labor multiplied by the wage. c. marginal product of labor divided by the wage. d. None of the above is correct.