Expansionary fiscal policy can cause a rise in real GDP in combination with
A. an increase in the price level.
B. a decrease in the price level.
C. no change in the price level.
D. a decrease in the price level if the aggregate supply curve is upward sloping.
Answer: A
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Political candidates often hold fundraisers by charging "per plate" for dinner. Wendy purchased four tickets to a $1,000 per plate dinner for a local city council candidate. Does this transaction benefit both parties?
A) Yes, but only if the dinners served actually cost $1,000 each. B) Yes, it was a voluntary exchange that benefited both parties. C) No, political candidates should never be allowed to overcharge for a fundraising dinner as that limits the number of people who can afford to attend. D) No, Wendy paid too much for four dinners.
The Federal Reserve System began operating in 1914, finally
(a) giving the U.S. its first 100 percent gold-backed paper money. (b) creating a privately-owned system for clearing checks on a national scale. (c) giving the U.S. its first government-owned central bank. (d) giving the U.S. its first unified currency issue, the Federal Reserve Note.
The difference between the gross public debt and the net public debt is
A) the sum of all previously accumulated government budget deficits and surpluses. B) the sum of all previously issued U.S. government securities that have been purchased by foreign residents. C) all private-sector borrowing from private sources. D) all government interagency borrowing.
If the Federal government enacts a new excise tax of $1.50 per case of soda. Which of the following is most likely to occur?
a. Consumers of soda will pay a higher price and buy a larger quantity. b. Consumers of soda will pay a higher price, which will increase the profits of soda companies, inducing them to sell a larger quantity. c. Consumers of soda will pay a higher price and buy a smaller quantity. d. Consumers of soda will buy less bottled water.