Discretionary fiscal policy will stabilize the economy most when:
A. deficits are incurred during recessions and surpluses during inflations.
B. the budget is balanced each year.
C. deficits are incurred during inflations and surpluses during recessions.
D. budget surpluses are continuously incurred.
A. deficits are incurred during recessions and surpluses during inflations
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Repos and reverse repos are
A) permanent injections or deletions of reserves. B) always dynamic policy tools. C) temporary injections or deletions of reserves. D) sometimes defense, but most often dynamic policy tools.
Many governments actively work to:
A. attract foreign direct investment, hoping it will build up their capital stock when domestic savings aren't sufficient. B. attract foreign direct investment, so that when foreign companies invest in local firms, they can transfer human capital to local managers. C. discourage foreign direct investment, in an effort to encourage locals to invest in their own economy. D. discourage foreign direct investment, in an effort to avoid "crowding out."
In Figure 16.2, according to supply-side theorists, a relaxation of trade barriers would result in a
A. Movement from point A to point B. B. Movement from point B to point A. C. Rightward shift in the Phillips curve. D. Leftward shift in the Phillips curve.
Suppose a monopolist has TC = 40 + 10Q + Q2, and the demand curve it faces is p = 130 - 2Q. What is the monopolist's total cost (TC) at the profit-maximizing level of output?
A) TC = 320 B) TC = 640 C) TC = 720 D) TC = 840