In general, the multiplier effect applies to changes in government spending but not to changes in taxation
a. True
b. False
Indicate whether the statement is true or false
False
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The change in wealth during a period equals:
A. public saving + private saving - transfers. B. saving - investment + capital gains - capital losses. C. saving - capital gains + capital losses. D. saving + capital gains - capital losses.
Crowding out refers to a decline in ________ as a result of an increase in ________
A) government purchases; private expenditures B) government purchases; tax rates C) private expenditures; government purchases D) tax revenues; unemployment
Refer to Figure 4.4. At an interest rate of 7%,
A) Foreign borrowers have an incentive to offer lenders in the United States an interest rate greater than 7%. B) Foreign lenders have an incentive to offer borrowers in the United States an interest rate less than 7%. C) U.S. lenders have an incentive to offer borrowers in the rest of the world an interest rate of 7%. D) U.S. borrowers have an incentive to offer U.S. lenders an interest rate greater than 7%.
Suppose a U.S. resident buys a car from a car maker in Japan. This transaction will:
a. have a negative effect on Japan's balance of trade in merchandise. b. have a negative effect on the U.S. balance of trade in merchandise. c. have a positive effect on the U.S. balance of trade in merchandise. d. bring money into the United States. e. have no effect on Japan's balance of trade in merchandise.