The arguments that the Obama administration used to justify the stimulus plan are
A. consistent with the discussion of politically-motivated actions taken by the powerful.
B. consistent with the theory expressed in the chapter's discussion of discretionary fiscal policy.
C. consistent with the discussion of expansionary bias.
D. inconsistent with the theory expressed in the chapter's discussion of discretionary fiscal policy.
Answer: B
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If there is no Ricardo-Barro effect, an increase in the government budget surplus
A) increases the supply of loanable funds. B) decreases private saving. C) increases private saving. D) decreases the supply of loanable funds. E) has no effect on the demand for loanable funds, the supply of loanable funds, or the real interest rate.
When a law freezes residential rents at their existing level for as long as the vacancy rate remains below some target level,
A) owners will be encouraged to supply additional rental units. B) rents will be frozen indefinitely, or at least until the law is changed. C) affordable housing to low-income people will be guaranteed. D) the vacancy rate will rise.
By studying the effects of choice architecture, we can:
A. expand the simplifying assumption that people always make the choices that are best for themselves. B. blend the ideas of psychology with core economic beliefs. C. open the possibility that we can no longer tell if someone is making a mistake or choosing something that is maximizing his utility. D. All of these statements are true.
Assuming that soybeans and tobacco can both be grown on the same land, a decrease in the price of tobacco, other things being equal, causes a(n):
A. rightward shift of the supply curve for tobacco. B. upward movement along the supply curve for soybeans. C. rightward shift in the supply curve for soybeans. D. leftward shift in the supply curve for soybeans.