Which of the following is an appropriate discretionary fiscal policy if equilibrium real GDP falls below potential real GDP?
A) an increase in the supply of money B) an increase in individual income taxes
C) a decrease in transfer payments D) an increase in government purchases
D
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The figure above shows Sam's budget line. Which of the following would result in Sam's budget line rotating outward and not changing its horizontal intercept?
A) a fall in the price of a pound of coffee B) a rise in the price of a pound of coffee C) a fall in the price of a gallon of gasoline D) a rise in the price of a gallon of gasoline
Which of the following is a characteristic of a natural monopoly?
a. Average cost exceeds marginal cost over large regions of output. b. Increasing the number of firms increases each firm's average total cost. c. One firm can supply output at a lower cost than two firms. d. All of the above are correct.