When the government decides to increase income taxes, this is an example of contractionary fiscal policy
Indicate whether the statement is true or false
True
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An investor will generally find that hiring an investment firm to actively manage his or her portfolio will
A) result in a higher return than would be received from an index mutual fund. B) be less expensive than simply placing money in an index mutual fund. C) result in a higher return, but will be more expensive than placing money in an index mutual fund. D) result in about the same return, but be more expensive than placing money in an index mutual fund.
Suppose there are two firms on a river and the production processes of both require clean water. The upstream firm's process dirties the water, which it dumps back into the river
The downstream firm must clean the water before using it in its production process. If the two firms would merge A) the external costs of the merged firm would equal the external costs of the upstream firm, which would then be passed on to its customers. B) the total costs of production fall since the external costs disappear. C) the external costs of the upstream firm are private costs after the merger. D) the internal costs of the downstream firm become external costs of the merged firm.
When net capital outflow is negative, it means that on net the value of domestic assets purchased by foreigners exceeds the value of foreign assets purchased by domestic residents
a. True b. False Indicate whether the statement is true or false
If the federal funds rate falls below the Fed's target range, the Fed could take:
A. an offensive action and sell government bonds. B. an offensive action and buy government bonds. C. a defensive action and sell government bonds. D. a defensive action and buy government bonds.