The long-run opportunity cost of government spending crowding out private investment:
a. equals about 10 percent of GDP
b. lowers interest rates and results in lower interest income for U.S. resource owners.
c. would be greater if the government's expenditures were invested in building better highways and a more educated workforce.
d. results from the corresponding contractionary gap.
e. would be greater if the government's expenditures were devoted to increasing retirement benefits rather than to educating the work force.
e
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In the equation of exchange, the concept that provides the link between M and PY is called
A) the velocity of money. B) aggregate demand. C) aggregate supply. D) the money multiplier.
All of the following statements are true except
A. Until 1971 the United States had run a trade surplus virtually every year of the 20th century. B. The U.S. ran relatively small trade deficits through most of the 19th century. C. The U.S. was the only industrial power to raise tariffs during the 1930s. D. World trade in the 1930s dwindled to a fraction of what it had been in the 1920s.
The hot stove method of discipline includes which of the following?
a. a warning b. immediate discipline/consequence c. consistent application d. all of the above
One effect of a stronger dollar is
A. an increase in net exports. B. an increase in U.S. exports and a reduction in U.S. imports. C. an increase in both imports and exports. The effect on net exports is uncertain. D. a reduction in U.S. exports and an increase in U.S. imports.