The economy is in a recessionary gap and a Keynesian economist advocates expansionary fiscal policy. What is a likely reason this economist advocates expansionary fiscal policy?
A) The economist believes the economy is stuck in a recessionary gap and crowding out will be complete.
B) The economist believes the economy is stuck in a recessionary gap and there will be no crowding out.
C) The economist believes that wages are too flexible and that crowding out will be incomplete.
D) The economist believes the AD curve is downward-sloping, the SRAS curve is upward-sloping, and prices are flexible.
E) none of the above
B
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In 1999 the European unemployment rate was ________ that in the United States
A) double B) triple C) equal to D) lower compared to
Althea is a student in your class. Althea wears a perfume called Essence of Efficiency. Bob really likes the scent of this perfume, and is disappointed on days when Althea doesn't wear it. Cathy is mildly allergic to this perfume. Her eyes water and her nose becomes runny when Althea comes to class wearing this perfume. Cathy is fine otherwise. This is a story about
a. too much perfume being produced b. too little perfume being produced c. an incomplete market d. inadequate allocation of responsibility e. market failure