Which of the following statements is not true with regard to automatic stabilizers?
a. The most important automatic stabilizer is the tax system
b. They act as shock absorbers to the economy.
c. They require legislative action.
d. Automatic stabilizers like government transfer payments change as business cycles conditions change.
c
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Which of the following is an assumption used in deriving a production possibilities curve?
A) Poverty always exists in society. B) The wages in an industry increase constantly. C) Prices will continue to increase. D) The amount of resources is fixed.
Recall the Application about the decrease in the price of wool in the 1990s to answer the following question(s). In the 1990s, the world price of wool decreased by about 30 percent and prices have remained relatively low since then. In 2012, an organization in New Zealand proposed that sheep shearing be added to the Commonwealth Games and the Olympics as a spectator sport in an effort to increase the awareness and the demand for wool.Recall the Application. If the organization in New Zealand was successful in getting the Olympics to include sheep shearing as a spectator sport, and this helped to raise the world price of wool, the quantity of wool supplied would ________ because the market supply curve for wool is ________ sloped.
A. increase; positively B. increase; negatively C. decrease; positively D. decrease; negatively
If the Fed buys $2 billion of short-term securities issued by the government of Japan and pays for them by writing a check for $2 billion,
A) its assets will rise by $2 billion and the monetary base will rise by $2 billion. B) its assets will fall by $2 billion and the monetary base will fall by $2 billion. C) its assets will rise by $2 billion and the monetary base will fall by $2 billion. D) its assets will fall by $2 billion and the monetary base will rise by $2 billion.
When an economy is at full employment, increasing its military production:
a. causes a movement along the PPF. b. causes an outward shift in the PPF. c. means that the economy is operating outside the PPF. d. means that the economy is operating inside the PPF.