Total spending by domestic residents, businesses, and governments is called
A) investment.
B) net domestic purchases.
C) absorption.
D) GDP.
C
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The current account balance of the United States began to deteriorate in
A) the late 1960s. B) the early 1970s. C) the early 1980s. D) the late 1980s. E) the early 1990s.
Which of the following statements about perfectly competitive markets is not correct?
a. In the short run, firms can earn economic profits or suffer economic losses. b. The market demand curve is downward sloping. c. The demand curve facing an individual firm is perfectly elastic. d. In the long run, firms can earn economic profits or suffer economic losses. e. In the long run, firms can enter or exit the market.
All of the following make the use of fiscal policy less attractive EXCEPT
A) that it cannot be effective unless it is accommodated with expansionary monetary policy. B) the substantial margin of error in the value of the multiplier. C) the legislative lag, which is the time it takes for Congress and the President to pass and implement the measure. D) the crowding out effect, which is the decrease in private spending that occurs due to increased government spending.
What is meant by the problem of time consistency in the conduct of financial system policy?
What will be an ideal response?