Suppose Congress increased spending by $100 billion and raised taxes by $100 billion to keep the budget balanced. What will happen to real equilibrium GDP?
A) There will be no change in real equilibrium GDP.
B) Real equilibrium GDP will fall.
C) Real equilibrium GDP will rise.
D) Real equilibrium GDP will initially rise, but then fall below its previous equilibrium value.
C
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During the Christmas shopping season, the demand for money increases significantly. To offset the increase in money demand, the Fed must ________ the money supply, which will put ________ pressure on nominal interest rates.
A. decrease; upward B. decrease; downward C. increase; downward D. increase; upward
As the baby boomer generation retires and takes money out of their retirement accounts, what is expected to happen to the interest rate, ceteris paribus?
A) It will increase. B) It will not change. C) It will decrease. D) It will decrease because of demand-side shocks.
Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Considering both country's production possibilities frontiers, we can conclude that Country B will specialize in:
A. trucks, and be willing to accept no fewer than 3 cars for each truck.
B. cars, and be willing to give no more than 3 cars for each truck.
C. trucks, and be willing to accept no more than 3 cars for each truck.
D. cars, and be willing to give no fewer than 3 cars for each truck.
Price discrimination is:
A. always legal. B. always illegal. C. only illegal if it hurts consumers more than nondiscrimination. D. only illegal if used to lessen or eliminate competition.