Automatic stabilizers are so-named because
A) they are automatically undertaken by the Federal Reserve Bank to reduce budget deficits.
B) they occur automatically when real GDP changes.
C) the policy suggestions of the Council of Economic Advisors are automatically followed.
D) the policy suggestions of the Office of Management and Budget are automatically followed.
B
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Capital, labor, and natural resources combine to produce goods and services. Which of the following will not lead to an increase in the ability of an economy to produce goods and services?
A) increased training for workers B) establishing a more productive technology C) new government restrictions on which technologies may be used to produce goods and services D) discovery of new oil reserves
The above figure shows a competitive firm's demand for labor assuming that the firm's output sells for $1 per unit. If the wage is $5 per hour, a ten cent per unit subsidy on the good sold by the firm will cause the firm to
A) demand less labor. B) demand more labor. C) raise the wage for workers to $5.10. D) None of the above.