Fiscal Policy Refers to

question 102

Multiple Choice

Fiscal policy refers to

• A) the use of fines to penalize unfair business practices.
• B) the purchase and sale of U.S. government securities to regulate the money supply.
• C) the adjustment of the GDP for inflation.
• D) a policy action by Congress to overrule unpopular budget cuts by the president.
• E) the use of government spending and taxation to influence the level of economic growth and inflation.

Understand the implications of goods being nonrival and/or nonexcludable on their consumption and provision.

Identify the effects of consumption characteristics (rivalry and excludability) on market efficiency.

Understand how different types of goods are managed or provided in society.

Understand the distinctions among private goods, public goods, common resources, and artificially scarce goods based on their characteristics of excludability and rivalry in consumption.

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Definitions:

Short-Run Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied by producers in the short term, under fixed resources and technologies.

Break-Even Point

The low point on the firm’s average total cost curve. If the price is below this point, the firm will go out of business in the long run.

Shutdown Point

The level of operation at which a business or economic activity is no longer profitable and should cease operations for financial reasons.

MC Curve

Refers to the Marginal Cost curve, which depicts the increase in total cost that results from producing one more unit of a good.