How do we tell whether a budget deficit needs discretionary action to remove it?
What will be an ideal response?
A budget deficit needs discretionary government action to remove it when the deficit is a structural deficit. If the deficit is a structural deficit, then even when the economy is at full employment, the deficit will remain. However, if the deficit is a cyclical deficit, then when the economy returns to full employment, the deficit will disappear.
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For a nondiscriminating monopolist, which of the following is false?
a. The monopolist produces where MR = MC. b. The monopolist's marginal revenue curve is the same as its demand curve. c. The monopolist will never produce in the inelastic range of its demand curve. d. A monopolist is more allocatively inefficient than a perfectly competitive firm. e. The monopolist produces where P > MC.
If resource owners anticipated a monetary growth rate of 6 percent, but the money supply actually grew at only 2 percent, then: a. real wages would fall
b. output would decrease. c. output would increase. d. output would increase, but only if nominal wages were increased more rapidly than prices. e. the expected inflation rate was less than the actual rate.