If the federal government were to run a budget deficit, this would:
a. increase the size of the national debt.
b. reduce the size of the national debt.
c. leave the size of the national debt unchanged.
d. increase the national debt only if the government also expands the supply of money.
Which of the following is infrastructure?
a. IBM computer plant.
b. Training and education.
c. Services of doctors.
d. None of these.
Which of the following is true?
a. The GDP gap is the difference between actual real GDP and full-employment real
GDP.
b. We desire economic growth because it increases the nation’s standard of living.
c. Economic growth is measured by the annual percentage increase in a nation’s real
GDP.
d. Discouraged workers are a reason critics say the unemployment rate is understated.
e. All of these are true.
The Monetary Control Act of 1980:
a. allowed savings and loan associations to offer checking accounts.
b. allowed more institutions to offer checking account services.
c. created greater competition among various financial institutions.
d. all of the above.
e. none of the above.
Which of the following will not shift the demand curve for televisions?
a. An increase in the price of televisions.
b. An increase in consumer income.
c. An increase in the price of radios (a substitute).
d. An increase in the price of cable service (a complement).
If an increase in investment of $50 causes an increase in real GDP of $250, the value of
the spending multiplier is:
a. 5.
b. .20.
c. .80.
d. 3.
e. 10.
The spending multiplier is defined as:
a. the ratio of the change in equilibrium real GDP to the initial change in spending.
b. the change in initial spending divided by the change in personal income.
c. 1 / (marginal propensity to consume).
d. 1 / (1 – marginal propensity to save).
Which of the following would be internal users of accounting information?
a. Customers and vendors
b. Employees and managers
c. Government and banks
d. Employees and customers
Supply-side economists argue that less government spending:
a. will contract the productive side of the economy.
b. will result in more crowding out.
c. causes higher rates of unemployment and inflation.
d. would cause interest rates to increase dramatically.
e. would make more investment capital available at lower rates of interest to the private
sector.
The consumption function expresses the:
a. relation between consumption and dissaving.
b. relation between consumption and disposable personal income.
c. purposes of consumption.
d. relation between consumption and dissaving.