Automatic stabilizers in the United States are:
a. changes in government transfer payments and tax revenues that vary automatically and inversely to business cycle changes.
b. controlled by the Federal Reserve System to help control the business cycle
c. able to completely eliminate all the lag problems associated with fiscal policy.
d. none of the above.
a
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Suppose there are three power-generating plants, each of which has access to 5 different production processes. The table below summarizes the cost of each production process and the corresponding number of tons of smoke emitted each.Process(smoke/day) A(4 tons/day) B(3 tons/day) C(2 tons/day) D(1 ton/day) E(0 tons/day) Cost to Firm X ($/day) $500$514$530$555$585 Cost to Firm Y ($/day) $400$420$445$480 $520Cost to Firm z ($/day) $300$325$360$400 $550Suppose the government requires each firm to reduce pollution to 2 tons of smoke per day, so that total daily smoke emission is 6 tons. The total cost to society of this policy will be ________ per day.
A. $42 B. $59 C. $135 D. $230
If fiscal stimulus creates a large budget ________, then in the long run economic growth ________
A) deficit; decreases B) surplus; increases C) deficit; increases D) surplus; decreases E) None of the above answers is correct. The figure above shows a nation's aggregate demand curve, aggregate supply curve, and potential GDP.
Which of the following is most likely to have an impact on the growth of productivity?
A) a decrease in the price level B) a decrease in real money balances C) an increase in the labor supply D) improvements in worker training
Suppose the 12-month interest rate on a U.S. Treasury bill is 16 percent, and the one-year interest rate on a comparable British Treasury bill is 6 percent. The exchange rate today is $2.00 per pound. What must be the expected exchange rate at maturity for interest rate parity to hold?
a. $1.00 = 0.50 pound b. $1.00 = 0.75 pound c. 1 pound = $2.20 d. 1 pound = $1.80 e. 1 pound = $2.50