In an open economy, aggregate demand is the sum of
A) consumer expenditure, actual investment spending, and government spending.
B) consumer expenditure, planned investment spending, and government spending.
C) consumer expenditure, actual investment spending, government spending, and net exports.
D) consumer expenditure, planned investment spending, government spending, and net exports.
D
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The budget deficit is defined as
A) T + (G + TR), and this is negative. B) T - (G + TR), and this is positive. C) T - (G + TR), and this is negative. D) T + (G - TR), and this is negative.
In the presence of no externalities
A) social marginal cost exceeds private marginal cost. B) social marginal cost is less than private marginal cost. C) social marginal cost equals private marginal cost. D) social marginal cost and private marginal cost cannot be compared.
Given the scenario described, if the market price of hammers increased from $7 to $11:
Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot can offer their hammer for a minimum of $7. Lace Hardware can offer the hammer for a minimum of $10. Bob's Hardware store can offer the hammer at a minimum price of $13. A. more producers would participate in the market. B. only Bob's Hardware would lose surplus. C. both Bob's Hardware and Lace Hardware would lose surplus. D. House Depot is the only producer that will gain surplus.
If the Federal Reserve sells $1,000 in bonds and, as a result, the money supply decreases by $2,500, what is the required reserve ratio?
a. 0.4 b. 2.5 c. 0.5 d. 0.1 e. 0.2