Which of the following business combinations likely exhibit economies of scope?
A) Banking services for individuals and banking services for other business
B) Retail clothing stores and electronic (internet) clothing sales
C) Hospitals that perform heart surgery and hospitals that perform cosmetic surgery
D) all of the above
D
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Richard receives government transfer payments and currently consumes five guns and six goose livers. Assume the price of guns decreases by 10% and the price of goose liver increases by 20%
The government raises Richard's transfer payments so he can still afford five guns and six goose livers. Does this constitute a true cost-of-living adjustment? A) No. Richard is overcompensated. B) No. Richard is undercompensated. C) Yes. The payment just achieves the right level of compensation. D) Not enough information.
The distinction between discretionary fiscal policy and the use of automatic stabilizers is that:
a. only discretionary fiscal policy can stimulate the economy b. only automatic stabilizers can stimulate the economy. c. discretionary fiscal policy, once adopted, is built into the structure of the economy. d. automatic stabilizers, once adopted, are built into the structure of the economy. e. only discretionary fiscal policy can be used by the federal government.