Which one of the following is an example of discretionary fiscal policy used to correct a recessionary gap?
A. an increase in the money supply by the Federal Reserve
B. a decrease in government expenditures approved by Congress
C. a tax decrease passed into law by Congress
D. an agreement among major banks to raise interest rates
Answer: C
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The above figure shows the domestic market for wheat. Suppose this market is isolated from global competition and the government intervenes by setting a support price of $15 a ton
The quantity bought by domestic users once the price support is in place is A) 300 million tons. B) 400 million tons. C) 250 million tons. D) 200 million tons. E) 100 million tons.
Refer to Table 4-4. Suppose that the quantity of labor demanded increases by 40,000 at each wage level. What are the new free market equilibrium hourly wage and the new equilibrium quantity of labor?
A) W = $8.00; Q = 390,000 B) W = $9.50; Q = 380,000 C) W = $10.00; Q = 390,000 D) W = $8.50; Q = 380,000