If society will gain by producing less X, then it must be the case that currently
A. PX < MCX.
B. PX = MCX.
C. either PX > MCX or PX < MCX.
D. PX > MCX.
Answer: A
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Which incentive scheme would simultaneously elicit accurate information about feasible plant production levels and motivate managers to perform up to potential (in the following schemes, B is the bonus payment, Q is actual plant output, and Qf is the
manager's estimate of feasible output)? A) B = 0.4Q B) B = 0.4(Q - Qf) C) B = 0.4Qf + 0.3(Q - Qf) if Q > Qf D) B = 0.4Qf - 0.6(Q - Qf) if Q < Qf E) B = 0.4Qf - 0.6(Q - Qf) if Q > Qf
The recognition lag is generally of equal duration for both fiscal policy and monetary policy.
Answer the following statement true (T) or false (F)
In order to measure gross domestic product, we can follow
A) three approaches: the expenditure approach, the income approach, and the production approach. B) only one approach: the circular flow approach. C) two approaches: the expenditure approach and the income approach. D) only one approach: the national accounts approach. E) three approaches: the expenditure approach, the income approach, and the market-based approach.
An increase in taxes will ________ consumption spending, and a decrease in transfer payments will ________ consumption spending
A) decrease; increase B) decrease; decrease C) increase; decrease D) increase; increase