The expansionary effects of an increase in government expenditures will tend to be offset, at least partially, if
a. government borrowing drives interest rates upward.
b. taxes are not also increased.
c. business decision makers and consumers become more optimistic as the result of the fiscal stimulus.
d. the economy is operating well below its full-employment capacity.
A
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Cash payments are generally preferable to in-kind payments when the utility of the transfer recipient is the only criterion because _____
a. it is cheaper to distribute in-kind benefits b. cash is necessary for utility maximization c. recipients know their utility functions better than anyone else d. of diminishing marginal utility
Closed economies generally do ________ open economies, in the long run.
A. about the same as B. better in some ways and worse in other ways than C. worse than D. slightly better than