To close a recessionary gap using fiscal policy, the government can:
a. increase government spending by the size of the gap
b. decrease government spending by the size of the gap.
c. increase government spending by more than the size of the gap.
d. increase government spending by less than the size of the gap.
e. decrease government spending by more than the size of the gap.
d
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Emma is a road construction worker. During the winter months, Emma finds it more difficult to get work. The unemployment Emma experiences in the winter is
A) seasonal. B) cyclical. C) functional. D) structural.
Suppose a tax equal to the value of the marginal external cost at the optimal output is imposed on a pollution generating good. All of the following will result from the tax except
A) an increase in the equilibrium market price. B) a decrease in the equilibrium quantity produced and consumed. C) a decrease in market supply of the good. D) an increase in demand for the good.