The coordination problem accompanying expansionary fiscal policy refers to
a. the tendency of increases in government expenditures to expand private sector output by an even larger amount.
b. the possibility that demand stimulus programs will direct resources toward unproductive projects and areas of full employment.
c. the possibility that borrowing to finance current spending will lead to lower future interest rates.
d. the reluctance of Congress to approve increases in government spending during a recession.
B
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Dumping is defined as the situation in which
A) foreign producers sell a product at a price below the cost of production. B) domestic producers are protected by tariffs. C) domestic producers sell a product at prices below the cost of production. D) foreign producers sell a product at a price above a fair level. E) domestic producers cut production to drive up domestic prices.
The idea that people will not consciously make decisions that make them worse off is known as
A) rationality assumption. B) the decision duality. C) Adam Smith's doctrine. D) incentive assumption.
Which of the following is not true of derived demand?
A. It derives from the price of output goods. B. It is a function of marginal physical productivity. C. It is the marginal revenue product curve. D. It is not affected by prices of the input factors.
Assume that all firms in this industry have identical cost curves, and that the market is perfectly competitive.
In the long run, how much profit will each firm in this industry earn each week?
A. $1,500 B. $2,000 C. $0 D. $1,000