The economic role of the legal system might best be described as
A) promoting the productive efficiency of competitive markets.
B) identifying and producing public goods.
C) establishing the "rules of the game" and acting as a referee when disputes arise among market participants.
D) identifying and producing merit goods.
C
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When the Fed lowers the federal funds rate, which of the following economic variables responds most slowly?
A) other short-term interest rates B) the inflation rate C) consumption expenditure D) the long-term real interest rate E) the supply of loanable funds
In 1944 the U.S. economy was temporarily operating at point _________.
A. A
B. B
C. C
D. D
What contributed to the United States recession of 2007-2009?
a. High Federal budget deficit b. Deflation in commodity prices and reduction in consumer saving c. Bank failure, panic among investors, and lack of confidence in paper currency d. Stock market collapse, drop in real estate values, and a drop in consumer spending
Assume there is no government or foreign sector. If the multiplier is 2, a $20 billion increase in planned investment will cause aggregate output to increase by
A. $5 billion. B. $10 billion. C. $20 billion. D. $40 billion.