Expansionary fiscal policy ________ the price level and ________ equilibrium real GDP
A) decreases; increases
B) increases; decreases
C) increases; increases
D) decreases; decreases
Answer: C
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Suppose that more British decide to vacation in the U.S. and that the British purchase more U.S. Treasury bonds. Ignoring how payments are made for these purchases,
a. the first action by itself raises U.S. net exports, the second action by itself raises U.S. net capital outflow. b. the first action by itself raises U.S. net exports, the second action by itself lowers U.S. net capital outflow. c. the first action by itself lowers U.S. net exports, the second action by itself raises U.S. net capital outflow. d. the first action by itself lowers U.S. net exports, the second action by itself lowers U.S. net capital outflow.
Why do polluting firms overproduce? Use a completely and correctly labeled graph to illustrate your answer.
What will be an ideal response?
Candy has a $100 gift card to a department store and needs a new watch. She walks into the store and is overwhelmed by the sheer number of watches and price points, from $30 to $3,000. She loves expensive luxury watches but has no other money to spend. She also loves cosmetics and would spend any money left over from the gift card on makeup. Explain how she can use the concept of marginal utility to analyze the options available to her and maximize her satisfaction.
What will be an ideal response?
One problem with the infant industry argument is that
A. it fails to protect domestic industries from foreign competition. B. it must be approved by the Federal Reserve Board. C. it must be approved by the IMF and the World Bank. D. the protection is typically never removed, creating a domestic monopoly.