Widespread acceptance of the Keynesian theory of fiscal policy
a. caused most economists to reject the public choice view of budget deficits.
b. relaxed the political pressure to balance the budget and, hence, paved the way for the persistent budget deficits of the last five decades.
c. was based on the view that continual budget deficits would help stabilize the economy.
d. increased the pressure for a constitutional amendment mandating that the federal government balance its budget.
B
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The opposite of the bandwagon effect is:
A. a network externality, positive or negative. B. a positive network externality. C. the substitution effect. D. the snob effect.
What distinguishes short-run cost analysis from long-run cost analysis for a profit-maximizing firm in the short run?
a. The size of the factory is fixed. b. There are no fixed costs. c. Output is not variable. d. The number of workers used to produce the firm's product is fixed.