Starting from a balanced budget, which of the following would NOT cause a deficit?
A) A decrease in taxes
B) An increase in spending of goods and services
C) An increase in transfer payments
D) A 50 percent increase in spending accompanied by a 40 percent increase in taxes
E) None of the above.
E
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Assume a closed economy with fixed taxes and the marginal propensity to consume is equal to 0.9. What is the government spending multiplier?
A) 10 B) 9 C) 5 D) 1
Which of the following will cause an outward (rightward) shift in the supply curve?
A) a reduction in the price of the good B) an increase in the price of labor input C) an increase in the number of consumers D) technological progress
In general, raising taxes has:
A. increasing returns to revenue. B. diminishing returns to revenue. C. increasing then decreasing returns to revenue. D. constant returns to revenue.
Growth in employment can result
a. from an increase in labor supply only b. from an increase in labor demand only c. from changes in technology only d. from an increase in either labor supply or labor demand e. only when the wage rate falls