Market power and externalities are examples of market failures
a. True
b. False
Indicate whether the statement is true or false
True
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The case of New Zealand, described in the text, concludes that a country's current account deficits are not sustainable if a country's
A) prospects for long term economic growth are above its global deficit growth. B) ability to sustain current account deficits is questionable. C) unproductive industrial sectors and its prospects for long run growth. D) labor productivity is below that of most other countries. E) exchange rate has fallen relative to other currencies.
If the U.S. dollar depreciates against the yen below the targeted exchange rate, the U.S. Federal Reserve has to intervene in the foreign exchange market such that:
a. the U.S. demand for yen rises. b. the supply of U.S. dollars rises. c. U.S. exports to Japan fall. d. the U.S. dollar is devalued. e. the supply of U.S. dollars falls.
The structural deficit is determined by established expenditure-transfer policies and tax rates and is independent of the current level of GDP.
Answer the following statement true (T) or false (F)
The Congressional Budget Office estimates the size of the tax multiplier to be ________ for a 2-year tax cut for lower- and middle-income people
A) 0.1 - 0.6 B) 0.3 - 1.5 C) 0.5 - 2.5 D) 2.0 - 3.0