Refer to the accompanying figure. If the current market price were $20:
A. there would be an excess supply of 25 units.
B. the market would be in equilibrium.
C. there would be an excess demand of 25 units.
D. there would be an excess demand of 35 units.
Answer: C
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Some economists believe that deficit spending can impose a burden on future generations. Which of the following does NOT explain the burden?
A) Investment will be crowded out by an increase in current consumption. B) Deficit spending that is allocated to purchases leads to long-term increases in real GDP. C) Future generations will have a smaller capital stock that will reduce their wealth. D) Future generations will have to be taxed at a higher rate.
The period of growth in real GDP between the trough of the business cycle and the next peak is called the:
a. recessionary phase. b. recovery phase. c. contractionary phase. d. cyclical phase.
As long as there are fixed resources, diminishing marginal returns will never exist
a. True b. False Indicate whether the statement is true or false