During recessions, automatic stabilizers tend to make the government's budget
a. move toward deficit.
b. move toward surplus.
c. move toward balance.
d. not necessarily move the budget in any particular direction.
a
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The equilibrium output level in the country of Plutonia is $44 billion, while its potential output is $74 billion. Suppose the central bank of the country implements an expansionary monetary policy. Which of the following is likely to occur?
a. An increase in interest rates will stimulate investment, shifting the aggregate demand curve to the right. b. A reduction in interest rates will stimulate investment, shifting the aggregate demand curve to the right. c. A reduction in interest rates will lower investment, shifting the aggregate demand curve to the left. d. An increase in interest rates will lower investment, shifting the aggregate demand curve to the left.
Marginal cost is the __________________; marginal revenue is the _______________.
Fill in the blank(s) with the appropriate word(s).