In comparing the changes in actual budget surplus and the structural surplus between 1993 and 1999, it is clear that the
a. actual surplus rose less than the structural surplus.
b. actual surplus and the structural surplus rose about the same.
c. actual surplus rose much more than the structural surplus.
d. tax increases of 1993 decreased the structural surplus more than they decreased the actual surplus.
c
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The amount of gross investment in the economy depends on the
A) response of expected output to the error in estimating the past period's actual output. B) amount of the difference between the desired capital stock and last period's capital stock that can be put in place this period. C) fraction of the capital stock that is replaced each period. D) All of the above are correct.
According to the new classical theory, if the public correctly anticipates a government policy to increase aggregate demand, then
A) there will be a short-run tradeoff between inflation and unemployment, but there will not be a long-run tradeoff. B) there will be a long-run tradeoff between inflation and unemployment, but there will not be a short-run tradeoff. C) there will be both a long-run and a short-run tradeoff between inflation and unemployment. D) there will be neither a long-run nor a short-run tradeoff between inflation and unemployment. E) there may be a short-run tradeoff between inflation and unemployment, but one cannot say for certain whether there will be a long-run tradeoff.
A person has a basic choice between eating meals at home and eating meals in a restaurant. The cost of the food that is eaten at home is $10 per meal. The cost of a restaurant meal is $20. It takes two hours to eat a meal at home (including
preparation time and cleanup time). It takes one hour of time to eat a meal in a restaurant. The marginal utilities of the home meal and the restaurant meal are the same. The person values time at $12 per hour. What does the theory of consumer behavior suggest the rational consumer will decide to do: eat at home or in a restaurant? Please provide the best answer for the statement.
The purchase of a new automobile is included in
A) consumption expenditures on services. B) consumption expenditures on nondurable goods. C) consumption expenditures on durable goods. D) investment expenditures.