The time it takes to recognize a recession and implement a spending stimulus is called a
A. fiscal drag.
B. multiplier.
C. retroactivity.
D. lag.
Answer: D
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Suppose that Tom bought a bike from Helen for $195. If Helen's reservation price was $185, and Tom's reservation price was $215, the seller's surplus from this transaction was:
A. $10 B. $215 C. $195 D. $20
If the government runs a primary deficit in year zero of B0, and, in year 1, decides to stabilize the debt (i.e., prevent the deficit from rising any further), then in year 1 and beyond, it must run a primary surplus equal to
A) zero. B) B0. C) (1 + r)B0. D) r. E) none of the above
If in the long run, imports are paid for by exports, then
A. any restriction of imports ultimately reduces exports. B. any restriction of imports ultimately expands exports. C. any restriction of exports has no impact on imports. D. any restriction of imports has no impact on exports.
Answer the following statement(s) true (T) or false (F)
1. The major reason education leads to higher wages is due to signaling. 2. Attending college can be seen as an individual’s attempt to raise their level of human capital. 3. Since mowing ones lawn is not done at their workplace, it is viewed as a use of their leisure time and thus (somewhat paradoxically) falls into the category of leisure. 4. One deficiency of labor-leisure indifference curve analysis is that because indifference curves are always tangent to the worker’s budget line, the model can not explain why some people choose not to work. 5. A firm’s marginal revenue product of labor equals the marginal product of labor times the cost per unit of the labor.