261. A situation where the firm is not in a position to recover its variable costs at the prevailing prices is known as:
Point of inflation
Equilibrium point
Optimum point
None of these
Correct answer: (D) None of these
262. The traffic which maximizes a country's economic welfare is called
Discriminatory traffic
Protective traffic
Optimum traffic
Non-Discriminatory traffic
Correct answer: (D) Non-Discriminatory traffic
263. Suppose that the MPC out of disposable income was 0.8 and the marginal tax rate was 0.25 for a given economy. In this case, the value of the tax multiplier in the simple Keynesian model would be
1
-2.
2.5
2
None of the above
Correct answer: (B) -2.
264. The role of the progressive tax system as an autonomous fiscal stabilizer requires that the budget
Should require actual deficits be equal to zero on average
Should go into a surplus at appropriate points in the business cycle.
Cannot have a structural deficit component
Both a & b
None of the above
Correct answer: (B) Should go into a surplus at appropriate points in the business cycle.
265. According to the partisan theory,
Politicians are viewed as working only for their own welfare.
There are two parties with flexible goals
Moderates and liberals often switch political goals
Macroeconomic policy is not a key focus of most politicians
None of these
Correct answer: (A) Politicians are viewed as working only for their own welfare.
266. Which of the following are the most frequently utilized tools of fiscal policy in the United States?
Indirect business taxes
Corporate income taxes
Inheritance taxes
Personal income taxes
Correct answer: (D) Personal income taxes
267. Which of the following statements are(is) correct?
Expansionary monetary policy and expansionary fiscal that leads to budget deficits create low interest rates
High interest rates in the first half of the 1980s resulted from falls in the budget deficit under the Reagan administration
The best monetary-fiscal policy mix to keep interest rates low would be to raise taxes and raise the money supply
The answer depends upon the school of thought used to evaluate the effects of deficit policies
Correct answer: (D) The answer depends upon the school of thought used to evaluate the effects of deficit policies
268. The cyclical deficit is that portion of the deficit
That results form the economy being below the natural rate of output
That would exist even if the economy were at its natural rate of output
Is a function of the level of automatic stabilizers
Both a & c
Correct answer: (D) Both a & c
269. Adam Smith advocated
Laissez Faire
Division of Labour
Both of these
None of these
Correct answer: (C) Both of these
270. When an individual's income falls(while everything else remains the same), his demand for an inferior good: