If the economy is expecting a severe recession, which fiscal policy would you recommend?
A. Reduce spending for welfare programs.
B. Reduce overall government spending.
C. Increase taxes to reduce consumption.
D. Reduce personal and corporate income taxes.
D. Reduce personal and corporate income taxes.
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Suppose an economy has no income taxes or imports. If the MPC is 0.75, what does the expenditure multiplier equal?
What will be an ideal response?
Under what conditions will competition among politicians for votes result in an efficient provision of a public good?
What will be an ideal response?
A market demand curve is found by adding the individual prices for each quantity demanded
a. True b. False Indicate whether the statement is true or false
The figure below shows the supply and demand curves for jeans in Smallville.
The equilibrium price will NOT lead to the largest possible total economic surplus if:
A. the market for jeans is perfectly competitive. B. the production of jeans generates air pollution. C. there are diminishing returns in the production of jeans. D. jeans are purchased by consumers with reservation prices greater than $40.