A small change in a variable is:
A. an average change.
B. a ceteris paribus change.
C. an efficient change.
D. a marginal change.
Answer: D
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If the government has no debt initially, but then has annual revenues of $10 billion per year for 4 years and annual expenditures of $10.5 billion per year for 4 years, then the government has
A) a budget surplus of $0.5 billion per year and a debt of $2 billion at the end of the 4 years. B) a budget deficit of $0.5 billion per year and a debt of $2 billion at the end of the 4 years. C) a budget surplus of $0.5 billion per year and a surplus of $2 billion at the end of the 4 years. D) a budget deficit of $0.5 billion per year and a budget surplus of $2 billion at the end of the 4 years.
The ________ determines the supply of money
A) Federal Reserve B) banking system C) President D) Congress
An increase in aggregate expenditure has what result on equilibrium GDP?
A) Equilibrium GDP falls. B) Equilibrium GDP rises. C) Equilibrium GDP is not affected by an increase in aggregate expenditure. D) Equilibrium GDP may rise or fall depending on the size of the increase in aggregate expenditure relative to the initial level of GDP.
In general, the fed funds rate
A) moves in the direction suggested by the Taylor rule. B) moves in the opposite direction as suggested by the Taylor rule. C) is uncorrelated with the Taylor rule prediction. D) None of the above.