Answer the following statement(s) true (T) or false (F)
1.The tax cuts made by Presidents Johnson and Reagan both led to a decline in economic growth.
2.Over time, any permanent change in government purchases must be fully offset by a change in private expenditure.
3.The time span before enough data are gathered to indicate the actual presence of a downturn is known as the recognition lag.
4.Unemployment insurance is the most important automatic stabilizer.
5.Changes in government transfer payments or tax collections that automatically tend to counter business cycle fluctuations are known as discretionary policies.
1.false
2.true
3.true
4.false
5.false
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The cost of producing an additional unit of a good or service that is borne by the producer of that good or service is the marginal
A) external cost. B) private cost. C) social cost. D) public cost. E) None of the above answers is correct.
With linear demand and supply curves in a market, suppose a tax of $0.20 per unit on a good creates a deadweight loss of $40 . If the tax is increased to $0.50 per unit, the deadweight loss from the new tax will be
a. $200. b. $250. c. $475. d. $625.