Refer to the diagram. Assume that G and T 1 are the relevant curves, the economy is currently at B, and the full-employment GDP is A. This economy has a(n):
A. cyclically adjusted budget surplus.
B. actual budget deficit.
C. cyclically adjusted budget deficit.
D. actual budget surplus.
D. actual budget surplus.
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A fall in the real wage rate ________ firms' profits and leads to ________ in the quantity supplied
A) does not change; no change B) lowers; a decrease C) raises; an increase D) raises; a decrease E) lowers; an increase
A decrease in Swiss prices will cause
A) an increase in the demand for U.S. dollars and an increase in the exchange rate of Swiss francs per dollar. B) a decrease in the demand for U.S. dollars and a decrease in the exchange rate of Swiss francs per dollar. C) an increase in the supply of U.S. dollars and a decrease in the exchange rate of Swiss francs per dollar. D) a decrease in the supply of U.S. dollars and an increase in the exchange rate of Swiss francs per dollar.
The price elasticity of demand for movies is approximately 1 and 500,000 tickets are sold per day. If the average price of a movie ticket increases by 20 percent, the number of tickets sold each day decreases to ________
A) 400,000 B) 300,000 C) 420,000 D) 475,000
According to Ricardian equivalence, the key consequence of an increase in the budget deficit that arises from a tax cut is ________
A) a decrease in private investment B) an increase in inflation C) an increase in the public's holding of government bonds D) an increase in the supply of money