An active stabilization policy designed to limit the size of government would
a. raise G to eliminate a recessionary gap and lower taxes to eliminate an inflationary gap.
b. raise G to eliminate a recessionary gap and raise taxes to eliminate an inflationary gap.
c. reduce taxes to eliminate a recessionary gap and raise G to eliminate an inflationary gap.
d. reduce taxes to eliminate a recessionary gap and reduce G to eliminate an inflationary gap.
d
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The following data show Uruguay's GDP using purchasing power parity in billions of dollars
Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 GDP($) 26.1 25.8 23.3 24.3 27.9 30.1 33.9 37.2 40.2 Using the data, we can conclude that A) Uruguay's economy reached a peak in 2000. B) GDP per person in Uruguay almost doubled between 2000 and 2008. C) potential GDP in Uruguay doubled between 2000 and 2008. D) Uruguay's economy was entered a recession in 2008.
Explain the difference between marginal cost and marginal benefit
What will be an ideal response?