One of the Potential Economic Problems Associated with the Extensive

question 175

Multiple Choice

One of the potential economic problems associated with the extensive use of macropolicy to recover from the Great Recession is

• A)the huge government deficits and the flood of money into the banks could set off an inflationary spiral.
• B)the large amount of government spending for job creation could result in rapid and uncontrollable increases in wages.
• C)the flood of money into the banks could cause excessive investment expenditures in the economy.
• D)the tax rebates made available to consumers could cause uncontrollable increases in the price of housing.

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Definitions:

Marginal Cost

A concept in economics that refers to the change in the total cost when an additional unit of a product is produced.

Average Total Cost

The total cost of production (fixed and variable costs) divided by the quantity produced, indicating the cost per unit of output.

Marginal Revenue

The additional income generated from the sale of one more unit of a good or service.

Total Revenue

The total amount of money received by a company from sales of goods or services, before any expenses are subtracted.