Why do economists think that the structural deficit is a good measure of the direction of fiscal policy?
a. Because it adjusts over the business cycle, and reflects the fiscal stimulus of policy.
b. Because it changes when policy changes, rather than when the economy changes.
c. Because it changes when monetary policy changes, reflecting the interest rate cost of debt.
d. Because it adjusts automatically, rather than requiring specific legislation.
b
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For a perfectly competitive firm, price is the same as
A) marginal revenue. B) average variable cost. C) total revenue. D) Both answers A and B are correct.
Which is a required characteristic of a perfectly competitive industry?
A) There are few firms so that none can influence market price. B) Products are highly differentiated. C) Barriers to entry are high. D) None of the above
The effects of the national health care program on goods and services markets will
A) increase the marginal cost of the firm. B) increase the quantity produced of the firm. C) consumers will pay lower prices for many goods and services. D) decrease the quantity demanded for all goods and services.
Suppose that 30% of a country’s population is institutionalized in schools, hospitals, or prisons; 10% are full-time homemakers; another 10% are retired; 45% of the population is employed either full-time or part-time; and 5% of the population is unemployed and seeking work. Then the unemployment rate is
a) 5% b) 10% c) 15% d) 25% e) 55%