One reason why the government may not choose to close a recessionary gap by raising both taxes and spending and thereby keeping the budget balanced is because it
a. leaves undone the problem of unemployment
b. can create inflation
c. may involve raising taxes too high for political comfort
d. eventually leads to deficit budgets
e. does not impact on aggregate demand which is where the problem lies
C
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That some talented people may not enter an occupation because they have heard that people with their personal characteristics do not get hired in that occupation is known as
A) economic discrimination. B) a negative feedback loop. C) a compensating difference. D) worker discrimination.
Thomas Malthus' prediction of mass starvation resulting from diminishing marginal returns has not been fulfilled because
A) the law of diminishing marginal returns did not hold in this case. B) Malthus ignored other factors like technological change. C) relative to Malthus' day, larger percentage of today's labor works in the agricultural sector. D) All of the above.
The above figure shows supply and demand curves for apartment units in a large city. At the unregulated equilibrium, producer surplus will be
A) d. B) d + e. C) d + g. D) d + c + g.
A move from an abnormally high rate of unemployment toward a more typical level of unemployment would: a. shift the production possibilities curve inward
b. shift the production possibilities curve outward. c. move society from a point inside the production possibilities curve toward the curve. d. move society from a point on the production possibilities curve to a point beyond the production possibilities curve.