It is inflationary for government to increase spending if:
a. it also cuts taxes.
b. the aggregate supply curve is flat.
c. the economy is at full employment.
d. equilibrium real GDP is well below full employment.
c
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Suppose you had information on the sales of similar homes just east and just west of the boundary between two school districts. How could you use those data to estimate the value parents place on the quality of their children's schools?
What will be an ideal response?
Which of the following statements about economic models is correct?
a. Economic models are built to mirror reality exactly. b. Economic models are useful, but they should not be used for the purpose of improving public policies. c. Because economic models omit many details, they allow us to see what is truly important. d. Economic models seldom incorporate equations or diagrams.
In the simple circular flow diagram, the flow of money from the firms to the markets for factors of production is called
a. spending. b. revenue. c. income. d. wages, rent, and profit.
A country has $20 billion of domestic investment and net capital outflow of $10 billion. What is saving?
a. $10 billion b. $30 billion c. -$20 billion d. -$30 billion