Questions from General Economics

Q: According to traditional Keynesian analysis, which has a larger impact on

According to traditional Keynesian analysis, which has a larger impact on GDP—a dollar of tax cuts or a dollar of additional government spending? Why?

Q: The experiment called the ultimatum game illustrates that people a.

The experiment called the ultimatum game illustrates that people a. are overconfident in their own abilities. b. play the Nash equilibrium in strategic situations. c. care about fairness, even to thei...

Q: The idea that economic downturns result from an inadequate aggregate demand for

The idea that economic downturns result from an inadequate aggregate demand for goods and services is derived from the work of which economist? a. Adam Smith b. David Hume c. David Ricardo d. John May...

Q: A public school district is deciding on the school budget and the

A public school district is deciding on the school budget and the resulting student–teacher ratio. A poll finds that 20 percent of the voters want a ratio of 9:1, 25 percent want a ratio of 10:1, 15 p...

Q: At any point on an indifference curve, the slope of the

At any point on an indifference curve, the slope of the curve measures the consumer’s a. income. b. willingness to trade one good for the other. c. perception of the two goods as substitutes or comple...

Q: Describe at least three ways in which human decision making differs from

Describe at least three ways in which human decision making differs from that of the rational individual of conventional economic theory.

Q: The government purchases component of GDP does not include spending on transfer

The government purchases component of GDP does not include spending on transfer payments such as Social Security. Thinking about the definition of GDP, explain why transfer payments are excluded.

Q: Goods and services that are not sold in markets, such as

Goods and services that are not sold in markets, such as food produced and consumed at home, are generally not included in GDP. Can you think of how this might cause the numbers in the second column o...

Q: Explain why an economy’s income must equal its expenditure.

Explain why an economy’s income must equal its expenditure.

Q: Which contributes more to GDP—the production of an economy car

Which contributes more to GDP—the production of an economy car or the production of a luxury car? Why?