Which of the following explains why elected representatives will find borrowing to be an attractive method of financing current government programs?
What will be an ideal response?
the shortsightedness effect
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A country must have absolute advantage in a good in order to have comparative advantage in that good
Indicate whether the statement is true or false
An intermediate good is a good that is
A) neither normal nor inferior. B) used as an input. C) a stand-in for all goods. D) is tangible good that includes substantial services.
Under the adaptive expectations hypothesis, which of the following is the most likely short-run effect of a move to a more expansionary monetary policy?
a. higher prices and no change in real output b. higher prices and expansion in real output c. no change in prices but an expansion in real output d. no change in either prices or real output
An economist would be more likely to argue against reducing inflation if she thought that
a. the central bank lacked credibility and if bonds were usually not indexed for inflation. b. the central bank lacked credibility and if bonds were usually indexed for inflation. c. the central bank had credibility and if bonds were usually not indexed for inflation. d. the central bank had credibility and if bonds were usually indexed for inflation.