Q. According to the concept of rational expectations
✅ Correct Answer: (A)
Budget deficits are irrelevant to output in the short-run
Managerial Economics MCQs and Notes
Q. Automatic stabilizers drive changes in
✅ Correct Answer: (B)
The cyclical deficit
Q. The cyclical deficit is that portion of the deficit
✅ Correct Answer: (D)
Both a & c
Q. In the IS-LM model, an easy monetary in conjunction with a tight fiscal policy
✅ Correct Answer: (D)
Both b and c
Q. The structural deficit is the deficit that
✅ Correct Answer: (C)
Exists when output is at its natural rate of output
Q. From the net tax function: T=t0+t1Y,where t0<0 and t1>0, it follows that, as income rises
✅ Correct Answer: (C)
average taxes falls and the deficit declines
Q. Assuming a simultaneous deduction in income taxes and transfer payments of $50 billion, then aggregate disposable income will
✅ Correct Answer: (C)
remain constant
Q. Which of the following statements are(is) correct?
✅ Correct Answer: (D)
The answer depends upon the school of thought used to evaluate the effects of deficit policies
Q. Advocates of the public-choice view argue that elected officials
✅ Correct Answer: (D)
None of the above
Q. During the recession of 2001,
✅ Correct Answer: (B)
A series of tax cuts were passed, though the only occurred in late 2001