Which of the following actions could be undertaken if the government wants to reduce a recessionary gap?
A. Increase taxes more than the amount of reduction in government spending.
B. Increase taxes and reduce government spending.
C. Increase taxes and increase government spending.
D. Reduce taxes and increase government spending.
Answer: D
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Long-run equilibrium in the goods and services market requires that decision makers who agreed to long-term contracts must have
a. incorrectly anticipated the level of prices when they made the agreements. b. correctly anticipated the level of prices when they made the agreements. c. correctly anticipated the natural rate of unemployment when they made the agreements. d. correctly anticipated actual GDP when they made the agreements.
If a firm manager has a base salary of $100,000 and also receives 5 percent of all profits, what percentage of his/her final income will be from a profit-sharing plan when profit equals $1,500,000?
A. 51 percent B. 48 percent C. 27 percent D. 43 percent