Which combination of fiscal policy actions would be most stimulative for an economy in a deep recession?
a. Increase taxes and government spending
b. Decrease taxes and government spending
c. Decrease taxes and increase government spending
d. Increase taxes and decrease government spending
c. Decrease taxes and increase government spending
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What is an inferior good?
A) a product of low quality that we do not want to purchase B) a product for which demand increases when income increases, and demand decreases when income decreases C) a product for which demand increases when income decreases, and demand decreases when income increases D) a product that is complementary E) a product that is a substitute for another, better good
A lawyer quits his job at a top legal firm where he was making $100,000 per year. He was just informed that his late aunt has bequeathed to him $1 million in cash. He decides to use all of the money to open and run his own hardware store
Assume at the end of the first year of business that his accountant has informed him that he earned a $90,000 accounting profit. Why would an economist not be quite as impressed? Explain.
If a country faces action under Section 301 of the U.S. Trade Act of 1974, it means that the country has
A) exceeded average import growth by more than 301 percent. B) exceeded average export growth by more than 301 percent. C) tariffs that are above 301 percent. D) been charged by the United States with systematically engaging in unfair trade practices. E) been charged by the WTO with violating its trade obligations.
From any point above the current LM curve, money market equilibrium can be restored by some combination of a ________ income and a ________ interest rate
A) higher, higher B) higher, lower C) lower, higher D) lower, lower