If disposable income decreases during a recession, there is
A) no change in consumption expenditures.
B) movement upward along the consumption function.
C) movement downward along the consumption function.
D) an upward shift in the consumption function.
E) a downward shift in the consumption function.
C
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Legislation that offers immediate and easily recognized benefits, at the expense of costs that are observable only in the distant future, is often enacted even when economic inefficiency results. This can be expected because of
a. a lack of incentive for operational efficiency in the public sector. b. market failure. c. the special-interest effect. d. the shortsightedness effect.
A supply-side policy to cure stagflation would include
A. Reduced government spending. B. A higher reserve requirement. C. Reduced government regulation. D. The purchase of securities in the open market by the Fed.