Which of the following statements exemplifies a principle of individual decisionmaking?
a. Trade can make everyone better off.
b. Governments can sometimes improve market outcomes.
c. The cost of something is what you give up to get it.
d. All of the above are correct.
c
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According to modern Keynesian analysis, an increase in aggregate demand leads to a higher price level because the
A) aggregate demand curve is upward sloping. B) short-run aggregate supply curve is upward sloping. C) aggregate demand curve is upward horizontal. D) short-run aggregate supply curve is vertical.
Which of the following is true of an annually balanced federal budget? a. Most economists agree that the federal government should balance its budget just as each household does. b. Such a policy would require the government to increase its spending when tax receipts decrease
c. Such a policy became popular between the 1930s and 1960s. d. Such a policy guarantees that the economy is its potential level. e. Such a policy could worsen a contractionary gap.
A U.S. firm exchanges dollars for yen and then uses them to buy Japanese goods. Overall as a result of these transactions
a. both U.S. net capital outflow and U.S. net exports rise. b. both U.S. net capital outflow and U.S. net exports fall. c. U.S. net capital outflow rises and U.S. net exports fall. d. U.S. net capital outflow falls and U.S. net exports rise.
Rational behavior often involves ______.
a. anticipating the future b. reflecting on the past c. random acts d. a disregard of values