Automatic stabilizers "lean against the prevailing wind" of the business cycle because:
A. wages are controlled by the minimum wage law.
B. federal expenditures and tax revenues change as the level of real GDP changes.
C. the spending and tax multipliers are constant.
D. they include the power of special interests.
Answer: B
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When some argue there is no "race to the bottom" today but instead a "race to the top," they are referring to
a. states doing whatever it takes to develop their economies and lead the world. b. people around the world being increasingly motivated by greed and profit. c. societies competing through technological skills and knowledge rather than low wages. d. nongovernmental actors overtaking the traditional powers and responsibilities of states.
The significance of the minimum point on the average variable cost curve is that
a. it is the profit-maximizing level b. it is the selling price c. it is the point of indifference between producing at a loss or shutting down d. if the firm produces one more unit, its AVC will be less than MC e. it shows the amount of total cost