Why do economists view structural budget deficit as a good measure of the direction of the fiscal policy?
Because it is based on the spending and taxing the government would be doing at some fixed level of GDP, rather than on actual expenditures and receipts, the structural deficit does not depend on the state of the economy. It changes only when policy changes, not when GDP changes. For that reason, most economists view it as a better measure of the thrust of fiscal policy than the actual deficit.
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Which of the following changes does NOT shift the long-run aggregate supply curve?
A) a decrease in the labor force B) a fall in the price level C) a rise in number of college graduates in the labor force D) a tax hike that reduces the capital stock
Critics of unions tend to focus on the fact that unions
A) tend to generate higher wages. B) reduce profits. C) are politically active. D) engage in restrictive labor practices.
Marginal revenue is
a. total revenue minus total cost b. total revenue divided by quantity of output c. the change in total revenue divided by the change in output d. the change in total revenue divided by the change in the quantity of an input used e. economic profit
Which of the following is true?
A) Managed equity funds merely hold stocks in the same proportion they are represented in a broad stock market index such as the Dow Jones Industrials. B) Indexed equity funds generally have lower management and operating costs than managed funds. C) Managed equity funds generally outperform indexed equity mutual funds. D) Indexed equity funds generally engage in more stock trading than managed funds.