In the rational expectations view, the best approach to fiscal policy is for the government to:
A. Cut taxes
B. Balance its budget
C. Eliminate transfer payments
D. Fix government spending
B. Balance its budget
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Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. The opportunity cost of one tomato in Country A is:
A. 100 bananas. B. 20 bananas. C. 5 bananas. D. 4 bananas.
Which term refers to a rule that every imported product must be opened by hand and inspected with a magnifying glass, by one of just three government inspectors available at any given time?
a. a non-tariff barrier b. a quota c. a government bureaucracy d. an import quota
Corporate income taxes
a. make recessions and inflationary episodes more severe b. make recessions and inflationary episodes less severe c. make recessions more severe and inflationary episodes less severe d. make recessions less severe and inflationary episodes more severe e. have no effect on the severity of recessions and inflationary episodes
The share of federal government spending on healthcare has risen substantially over time. This is most likely a result of
a. medical advances that provide new, better, but often more expensive medical treatments. b. a rising population of the elderly in the economy. c. health insurance reform that will include government subsidies for health insurance for many low-to-moderate income families. d. All of the above are important factors.