The federal government buys Treasury bonds in the open market when it incurs a budget deficit
a. True
b. False
Indicate whether the statement is true or false
False
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The annual inflation rate measures the percentage growth rate of
A. the CPI from one year to the next. B. the CPI from the base period 1982-84 to a given year. C. real GDP from the base period 1982-84 to a given year. D. real GDP from one year to the next.
What does the phrase "internalizing an external cost" mean?
A) forcing producers to factor into their production costs the cost of the externalities created in the production of their output B) finding a way to address cross-border pollution C) limiting the extent to which domestic firms can outsource production D) prohibiting economic activities that create externalities
With reference to the graph above, if the intended aim of the price ceiling set at $6 was a net increase in the well-being of consumers, then positive analysis would conclude:
A. the policy was effective, since surplus gained by consumers through lower prices is greater than the surplus they lost through deadweight loss.
B. the policy was ineffective, since surplus gained by consumers through lower prices is less than the surplus they lost through deadweight loss.
C. the policy was effective, since surplus lost by producers through lower prices is less than the surplus gained by consumers through lower prices.
D. the policy was ineffective, since the amount of deadweight loss is greater than the surplus gained by consumers from lower prices.
Under a progressive tax system:
a. the average tax rate increases with increases in real GDP. b. the average tax rate remains constant with changes in real GDP. c. the average tax rate falls with increases in real GDP. d. government tax receipts increase when the economy is in a recession. e. government tax receipts decrease when the economy is expanding.