In year 1, the actual budget deficit was $150 billion and the cyclically adjusted deficit was $125 billion. In year 2, the actual budget deficit was $125 billion and the cyclically adjusted deficit was $100 billion. GDP was $1000 billion in year 1 and $1005 billion in year 2. It can be concluded that fiscal policy from year 1 to year 2 was:
A. proportional.
B. expansionary.
C. contractionary.
D. progressive.
Answer: C
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In the figure above, if the MPC increased, the aggregate expenditure lines would ________ and the multiplier would ________ in value
A) not change; rise B) become steeper; fall C) not change; fall D) become steeper; rise E) become less steep; rise
Refer the above figure. An increase in labor productivity is likely to stimulate and shift the labor demand curve to
A) the right and hence increase union wages per year. B) to the left and hence increase union wages per year. C) the right and hence lower union wages per year. D) None of the above is likely to happen.
Which of the following are three key components of the economic problem?
a. scarcity; choice; giving up valuable opportunities b. surplus; choice; competing opportunities c. scarcity; competing opportunities; income d. surplus; income; giving up valuable opportunities
Which of the following terms best characterizes the demand for health care?
A. Price elastic B. Price inelastic C. Income inelastic D. Negative cross elasticity