To combat a recession with discretionary fiscal policy, Congress and the president should
A) decrease government spending to balance the budget.
B) decrease taxes to increase consumer disposable income.
C) lower interest rates and increase investment by increasing the money supply.
D) raise taxes on interest and dividends, but not on personal income.
Answer: B
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Which of the following holds the reserves of private banks in the United States?
A) The Treasury Department B) The Fed C) The Pentagon D) Various venture capitalists
Compared to the 1960s, during most of the 1990s average annual real GDP growth was ________ while the average ratio of net investment to output was ________
A) slightly lower, much lower B) much lower, slightly higher C) much higher, much lower D) slightly higher, slightly lower
In a one-person Robinson Crusoe economy, labor specialization
a. can shift the production possibilities curve to the right b. is already present because Crusoe produces everything himself c. can decrease production of all types of goods d. cannot increase production e. is impossible
Police protection in a community is an example of a _____
a. merit good b. club good c. public good d. private good