In the long run, most economists agree that a permanent increase in government
spending leads to
A) no decrease in private spending.
B) a decrease in private spending by less than the amount that government spending
increased.
C) a decrease in private spending by the same amount that government spending
increased.
D) a decrease in private spending by more than the amount that government spending
increased.
Factory incentives on cell phones have encouraged consumers to upgrade their phones.
How does this affect the market for bluetooth headsets?
A) The quantity of bluetooth headsets demanded increases.
B) The quantity of bluetooth headsets demanded decreases.
C) The demand for bluetooth headsets increases.
D) The demand for bluetooth headsets decreases.
When the coupon rate on newly issued bonds decreases relative to older, outstanding
bonds, what happens?
A) The market price of the older bond falls in the secondary market.
B) The market price of the older bond rises in the secondary market.
C) Older bonds can still be sold at their face value.
D) Older bonds will sell for more than their face value.
If consumers purchase fewer of those products that increase most in price and more of
those products that decrease in price as compared to the CPI basket, then
A) changes in the CPI accurately reflect the true rate of inflation.
B) changes in the CPI understate the true rate of inflation.
C) changes in the CPI overstate the true rate of inflation.
D) changes in the CPI are unrelated to the true rate of inflation.
An economy that does not have interactions in trade or finance with other economies is
referred to as
A) an open economy.
B) a closed economy.
C) a trade-balanced economy.
D) a net foreign investment economy.
If the United States has a net export deficit, which of the following must be true?
(Assume that the capital account is zero and net transfers are zero.)
A) The balance on the financial account must equal the balance on the current account.
B) Net foreign investment must be negative as well.
C) Domestic private saving must be less than net foreign investment.
D) Domestic public saving must be less than net foreign investment.
Before 1980, most U.S. corporations raised funds
A) in U.S. and foreign banks.
B) in U.S. stock and bond markets or in U.S. banks.
C) in U.S. stock and bond markets or in foreign capital markets.
D) in U.S. banks or in foreign capital markets.
Which of the following would be considered an active fiscal policy?
A) The Fed increases the money supply.
B) Tax incentives are offered to encourage the purchase of fuel efficient cars.
C) Spending on the war in Afghanistan is increased to promote homeland security.
D) A tax cut is designed to stimulate spending passed during a recession.
To calculate GDP using the value-added method, one would add up
A) the market value of final goods and services produced during a particular period.
B) only the value added by the underground economy.
C) the value added by each firm involved in the production of final goods and services.
D) the market value of intermediate goods and services produced during a particular
period.
According to the saving and investment equation, if net foreign investment rises by $60
million,
A) national saving will increase by $60 million.
B) national saving will fall by $60 million.
C) domestic investment will rise by $60 million.
D) private saving will fall by $60 million.
Should European nations which are not currently using the euro choose to adopt the
euro as their currency, these countries would risk giving up the ability to use ________
to stabilize their economies in the event of a recession.
A) expansionary fiscal policy
B) contractionary fiscal policy
C) expansionary monetary policy
D) contractionary monetary policy
Evidence shows that many people who delay searching for a job for a year or longer
after they are laid off
A) find it more difficult to find new employment than if they had searched for a new
job soon after they were laid off.
B) find it easier to find new employment than if they had searched for a new job soon
after they were laid off.
C) find that they have little to no chance to find new employment after being
unemployed for so long.
D) find that the extra unemployment benefits they receive during their extended period
of unemployment more than make up for the difficulty in finding a job once they decide
to re-enter the workforce.
Of the following high-income countries, which has the highest life expectancy at birth?
A) Canada
B) Japan
C) the United Kingdom
D) the United States