Which of the following most clearly indicates that fiscal policy is becoming more expansionary?
a. An increase in the budget deficit relative to GDP
b. A reduction in the budget deficit relative to GDP
c. An increase in the budget surplus relative to GDP
d. An increase in the nominal (dollar) size of the budget deficit
A
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What does the circular flow model show?
(A) What inputs are required for what outputs. (B) How many firms can support the needs of how many households. (C) How profits are made. (D) The interactions between households and businesses in the free market.
Joe's Taco Hut can purchase a delivery truck for $20,000 and Joe estimates it will generate a net income (after taxes, maintenance and operating costs) of $2,000 per year. He has no other opportunities. He should:
A. not purchase the truck if the real interest rate is greater than 2 percent. B. purchase the truck if the real interest rate is greater than 10 percent. C. purchase the truck only if the real interest rate is less than 2 percent. D. purchase the truck if the real interest rate is less than 10 percent.
Which of the following is a loan that entitles the lender to get regular interest payments over time, and then to get back the principal at the end of the term of the loan?
A. A revolving credit account B. A mutual fund C. A share of stock D. A bond
For Elliot's dog-walking service, the only variable input is labor. Elliot's labor costs are $300 a day and his service walks 30 dogs per day. To walk 31 dogs per day, his labor costs increase to $305 a day. The marginal cost of walking that 31st dog is
A. $5. B. $9.83. C. $19.52. D. indeterminate from the information given.