Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and reserve-related (central bank) transactions become more negative (or less positive).
b. The GDP Price Index falls, and reserve-related (central bank) transactions remain the same.
c. The GDP Price Index and reserve-related (central bank) transactions remain the same.
d. The GDP Price Index rises, and reserve-related (central bank) transactions remains the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.D
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Those from across the spectrum of political views tend to approve of markets because
A. markets are effective in solving many of society’s problems. B. markets work well in all cases and can be relied upon to solve problems. C. their goals are similar enough that they can rely on the same means. D. production is the most important goal, and market systems are very productive. E. All of these perspectives listed in these responses are correct.
In the current year, a nation's government spending equals $15 trillion and its revenues are $20 trillion. Which of the following is TRUE?
A) The nation's national debt equals $5 trillion. B) This nation has a current year budget surplus of $5 trillion. C) This nation is currently running a budget deficit of $5 trillion. D) The nation has a current year trade surplus of $5 trillion.
If the government increases the income tax rate:
A. total income increases. B. disposable income remains unaffected. C. disposable income increases. D. disposable income decreases.
Recall the Application about allegations that the makers of branded drugs made deals with generic drug makers once the patents expired on branded drugs to answer the following question(s).According to the Application, brand name drugs and generic drugs are ________ each other.
A. virtually identical to B. completely different from C. slightly similar to D. perfect complements of