The Gramm-Rudman-Hollings Act of 1985 created a
A. Mandated balanced budget by 2005.
B. Debt ceiling.
C. Prohibition against external financing of the debt.
D. Deficit ceiling.
Answer: D
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Answer the following statement(s) true (T) or false (F)
1. Although a sales tax hurts both producers and consumers, their losses are fully offset by the benefits created by the tax revenues. 2. One effect of a tax is that output in the market which is taxed falls. 3. Even if total surplus is maximized, there is still a chance that there will be a deadweight loss. 4. When the Pareto criterion is used to choose between different policies, any recommendation requires unanimous agreement. 5. If the potential Pareto criterion rejects a policy change, then the efficiency criterion will reject it as well.
If the cross elasticity of demand between two goods is -0.56, then a fall in the price of one good leads to a ________ shift in the ________ of the other good
A) rightward; demand B) rightward; supply C) leftward; demand D) leftward; supply
In the aggregate expenditures model, if aggregate expenditures (AE) are less than GDP, then GDP decreases
a. True b. False Indicate whether the statement is true or false
In the production function Real GDP = T (L, K), the T stands for tax coefficient
Indicate whether the statement is true or false