An increased federal budget deficit resulting from a recession can actually help stabilize an economy, because corporate profits tend to fall in a recession which, in turn, results in ________ corporate taxes and ________.
A. higher; more tax revenue for the government
B. higher; larger profits for businesses
C. lower; fewer spending cuts for businesses
D. lower; increases in the price level
Answer: C
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A shift of the U.S. demand curve for Mexican pesos to the left and a decrease in the peso price per dollar would result from
a. an increase in the U.S. inflation rate relative to the rate in Mexico. b. a change in U.S. consumers' tastes away from Mexican products and toward products made in South Korea, India, and Taiwan. c. U.S. buyers perceiving that domestically - produced products are of a lower quality than products made in Mexico. d. all of the above answers are correct.
A competitive equilibrium is Pareto optimal if there is no way to rearrange or to reallocate goods so that
A) anyone can be made better off. B) no one can be made worse off. C) someone can be made better off without making someone else worse off. D) someone can be made better off without making everyone else worse off.
Incentives matter
What will be an ideal response?
Oligopoly is
A) always efficient. B) efficient only if the firms cooperate. C) efficient only if the firms play non-repeated games. D) generally not efficient. E) efficient only if the firms innovate.