Answer: Option (A) is correct.
Explanation:
If there is a higher inflation rate in an economy and it is still rising because aggregate demand is rising at a faster rate than an aggregate supply.
So, there is a need to use contractionary fiscal policy. If the government increase taxes then as a result aggregate demand decreases. This is because of the fall in disposable income, with less income in hand consumers demand for the goods decreases.
Hence, this contractionary fiscal policy will help government to reduce inflation to some extent.
Answer:
The correct answer is option B.
Explanation:
Diseconomies of scale refer to the situation when a firm reaches that stage where increasing output causes the average cost of production to increase instead of decreasing.
This stage comes after the firm has reaped the economies of scale. Diseconomies can arise because of external as well as internal factors.
The main reason behind the diseconomies is that as the firms become increasingly large, it becomes difficult to efficiently coordinate production.
With large scale production, overcrowding of machines and workers create a mismatch and causes the cost to increase. Also with large scale communication between workers and departments become less effective. All these make it difficult to coordinate the production process.
Answer:
B, reduced supply of labor, higher wages
Explanation:
Government laws have a minimum wage that has to be earned by the company to employ a person.
Answer:
$1,000; $1,000
Explanation:
Given that,
Household saving = $300
Business saving = $700
Government purchases = $1,000
Government transfers and interest payments = $500
Government tax collections = $1,500
GDP = $5,000
Public saving:
= Government tax collections - Government purchases - Government transfers and interest payments
= $1,500 - $1,000 - $500
= $0
Private savings:
= Household saving + Business saving
= $300 + $700
= $1,000
National savings:
= Public saving + Private saving
= $0 + $1,000
= $1,000
Answer:
400,000
Explanation:
7% of what number = 28,000
(0.07)(X) = 28,000
X = 400,000
(which is less than 700,000. But that makes sense because not everyone living in Michael's city is necessarily part of the labor force. Some could be kids in school, others grandparents who have retired, others people who stay at home and don't work.)