Suppose the U.S. economy is producing at the natural rate of output. A depreciation of the U.S. dollar will cause ________ in real GDP in the short run and ________ in inflation in the long run, everything else held constant
(Assume the depreciation causes no effects in the supply side of the economy.) A) an increase; an increase
B) a decrease; a decrease
C) no change; an increase
D) no change; a decrease
A
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Compared to an economy’s self-correcting mechanism, active contractionary fiscal policy will
A. work more slowly and calmly. B. work more quickly. C. have less deflationary effects. D. have a smaller effect on real GDP.
Minimum wages are:
A. not very controversial. B. always needed to guarantee workers an acceptable standard of living. C. a form of government interference in the free market. D. only enforceable at the federal level.
When economists talk about innovation, they refer to
a. the relationship between growth and employment b. one of the basic problems in economics c. the relationship between technology and scarcity d. the relationship between growth and scarcity e. ideas that eventually take the form of new applied technology
Which of the following is the best example of a health-care service with a large public good component?
a. a hair-growing treatment provided to a twenty-five year-old single man b. heart bypass surgery provided to an employee and paid for by employer-funded insurance c. a vaccine that reduces the incidence of a communicable disease d. a hip replacement provided to a senior citizen