Examples of transfer payments are
A) wages, profits, and rents.
B) Social Security checks and unemployment insurance payments.
C) salaries of educators, police, and firefighters.
D) federal government spending for national defense.
Answer: B
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Which of the following is a common method used by government to cope with the situation in which production of a good creates an external cost?
A) removing property rights B) subsidizing production C) marketable permits D) lottery E) vouchers
Nonactivists hold that
A) activist monetary policies are likely to be destabilizing rather than stabilizing. B) economic fine-tuning is quite feasible. C) flexibility in wages and prices is sufficient to allow the economy to return at a reasonable speed to full-employment output. D) a and c E) all of the above
Demand-pull inflation is caused by
A. aggregate demand increasing along an upward sloping or a vertical aggregate supply curve. B. aggregate demand decreasing along an upward sloping or a vertical aggregate supply curve. C. aggregate demand increasing along a horizontal aggregate supply curve. D. aggregate demand decreasing along a horizontal aggregate supply curve.
The Canadian economy can be characterized by Equation 24.2.EQUATION 24.2:C = 500 + 0.5YdTaxes = 600Equilibrium Output = $4,000Refer to Equation 24.2. At equilibrium leakages in Canada equal
A. $1,700. B. $1,750. C. $1,800. D. $2,100.