The structural deficit can be defined as
a. the deficit that is structurally obstructing economic recovery to reach level of high employment.
b. a hypothetical construct that estimates the deficit, given current tax rates and expenditure policies, if the economy were operating at some fixed high-employment level.
c. the deficit necessary to restructure the economy and reach a desired high-employment level.
d. the deficit that would prevail if fiscal policy were structured differently in order to reach a desired high-employment level.
b
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If the interest rate increases, then the:
a. economy will move to a new point along the existing consumption function. b. consumption function will shift up. c. consumption function will shift down. d. investment demand curve will shift up. e. economy will move to a new point along the existing investment demand curve.
In Figure 2.1, a "P" for price would go in
A. Box 2. B. Box 4. C. Box 6. D. Box 1.
In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the
equilibrium quantity (Q) of X. Refer to the given information. An improvement in the technology used to produce X will: A. decrease S, increase P, and decrease Q. B. decrease S, increase P, and increase Q. C. increase S, decrease P, and increase Q. D. decrease D, decrease P, and decrease Q.
Which of the following statements is correct?
A. The pure monopolist will maximize profit by producing at that point on the demand curve where elasticity is zero. B. In seeking the profit-maximizing output, the pure monopolist underallocates resources to its production. C. The pure monopolist maximizes profits by producing that output at which the differential between price and average cost is the greatest. D. Purely monopolistic sellers earn only normal profits in the long run.