Employing the government budget diagram shown in Figure 5-1 above, assume that the economy is initially in equilibrium at point A. The movement A to D represents
A) an increase in government spending and/or a decrease in taxes.
B) a decrease in government spending and/or an increase in taxes.
C) a decrease in government spending and a decrease in taxes.
D) an increase in government spending and an increase in taxes.
B
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"Monetary instability has been the major cause of economic instability in this country. Expansion in the money supply has been the source of every major inflation. Every major recession has been either caused or perpetuated by monetary contraction." Who among the following would most likely adhere to this view?
a. Monetarists. b. Keynesians. c. Demand-side economists. d. Quantity theorists.
Free trade may lead to more pollution because
A. with free trade, the size of the economy increases resulting in higher production and consumption. B. competition among nations invariably leads to less restrictive pollution standards. C. imported products are produced using cleaner production techniques than domestic products. D. the countries may not specialize in the production of goods in which they have comparative advantage.