Revenue and expenditure items in the federal budget that automatically change with the economy in such a way as to make GDP less stable are known as
A. line-item shocks.
B. automatic destabilizing policies.
C. eradication enhancers.
D. crowding-out imbalancers.
Answer: B
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Suppose voter preferences over a public good funded through a head tax are single peaked. If everyone has the same tastes and the public good is a normal good, then ideal points for higher income individuals will lie to the right of ideal points of lower income individuals.
Answer the following statement true (T) or false (F)
Producer surplus is the difference between the lowest price a firm is willing to accept for a product and the price it actually receives for the product
Indicate whether the statement is true or false
If the benefits from trade are larger than the costs of trade, _____
a. a tariff should be imposed on the traded good b. trade should be allowed c. the domestic price of the traded good should be regulated d. the domestic consumption of the traded good should be taxed
When a depreciation in the nation's real effective exchange rate initially lowers the trade balance and then increases it, economists refer to the phenomenon as:
a. the K-curve effect. b. the J-curve effect. c. the real balances effect. d. the marginal propensity to import.